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CU System
Foreclosures near military four times national average
IRVINE, Calif. (5/30/08)--Foreclosures in U.S. towns where soldiers live are increasing at a pace four times faster than the national average, according to a survey by RealtyTrac Inc. of Irvine, Calif. Earlier this month, RealtyTrac released its April 2008 U.S. Foreclosure Market Report which indicates that foreclosure filings nationwide--default notices, auction sales notices and bank repossessions--were reported on 243,353 properties, a 4% increase from the previous month and nearly a 65% increase from April 2007. Foreclosure filings near military bases from January to April compared with a year earlier were up as high as 492%, according to the report. Among the leaders:
* Columbia, S.C.: 492% increase; * Woodbridge, Va.: 414%; * Triangle, Va.: 363%; * Oceanside, Calif.: 182%; * Norfolk, Va.: 155%; * Havelock, N.C.: 133%; * Carlsbad, Calif.: 131%; * Barstow, Calif.: 120%; * Columbus, Ga.: 102%; and * Twentynine Palms, Calif. 73%.
However, the trend has not affected some of the defense credit unions in these areas. AllSouth FCU, formerly Ft. Jackson FCU, a 406.4 million asset, Columbia, S.C.-based credit union, is not seeing any rise in foreclosures among its members, Thomas Boswell, AllSouth vice president of mortgage lending, told News Now. “The area we’re in is having some [foreclosure] issues, but our particular credit union is not,” Boswell said. “We’ve been extremely fortunate so far. Delinquencies have increased slightly, but we’ve only had one foreclosure all year in 2008.” Columbia, S, C., home to Fort Jackson, has seen a 492% rise in foreclosures so far this year compared with last year, according to RealtyTrac. Payday lenders often get blamed, but Boswell said it’s hard to pinpoint one specific issue for the rise in foreclosures. Payday lending is more of contributing factor rather than a root cause of the problem, he added. The Norfolk, Va., branch of Chartway FCU, a $1.3 billion asset, Virginia Beach-based credit union, has not seen a spike in foreclosures. “We’ve only had one foreclosure this year--a physician who lost his job,” Ron Burniske, Chartway president/CEO, told News Now. Payday lenders, although prevalent, have not impacted his credit union, Burniske added. “There are a tremendous number of payday lenders in our area that gravitate to military bases--we have three bases in our area,” he said. “We haven’t had any direct exposure to them. People who gravitate to payday lenders are not members of credit unions, because we have better services and prices than payday lenders. Most contacts with payday lenders are non-bank contacts; they’re usually not members of credit unions,” he said. The Center for Responsible Lending’s (CRL) research shows that the payday lending business model is designed to keep borrowers in debt, not to provide one-time assistance during a time of financial need. According to CRL's research, borrowers who receive five or more loans a year account for 90% of the lenders’ business. A CRL report shows that payday lenders cost American families $4.2 billion every year in predatory fees. CRL has not conducted any research that studies causation between payday lending and foreclosure rates, Sharon Reuss, CRL spokesperson, told News Now. “However, payday loans do drain wealth from people,” she said. Norfolk, Va., has seen a 155% rise in foreclosure filings, according to RealtyTrac. The Oceanside, Calif., branch of Pacific Marine CU, a $497.4 million asset, Camp Pendleton, Calif.-based credit union, told News Now it is a very conservative lender and has no foreclosures. Oceanside has experienced 182% rise in foreclosure filings this year compared with a year ago, RealtyTrac said.
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