The national mortgage crisis is driving foreclosure rates skyward in some states, but so far, that has not been the case in Kentucky. And as Kentucky Public Radio’s Tony McVeigh reports, proactive steps taken by state leaders may be part of the reason why.
Last month, 304-thousand properties, or one in every 416 American households, were in foreclosure. RealtyTrac.com says national foreclosure rates are up 27-percent from August 2007. States with the highest foreclosure rates are Nevada, California and Arizona, followed by Florida, Michigan, Georgia, Ohio, Colorado, Illinois and Indiana. Kentucky, with a 75%homeownership rate, is faring better. The Commonwealth’s annual foreclosure rate currently stands at six percent, 42nd in the nation. But it has risen in recent years.
“In 2005 foreclosure sales, we had 10,100. In 2006, we had 14,000. In 2007, we had 15,900, and 2008, year-to date-foreclosures through the end of June, is at 8,500. So if it continues on the previous track, we’re probably looking at about 17,000 for 2008,” says Scott Brown of the Administrative Office of the Courts, which tracks fees paid to Master Commissioners who sell foreclosed properties on courthouse steps.
The highest foreclosure rates are in Jefferson, Kenton, Boone and Fayette counties. Some of the lowest rates are in eastern Kentucky. But the recent rise in foreclosure rates is of concern to state leaders, and legislation approved by the 2008 General Assembly is helping distressed homeowners avoid foreclosure. House Bill 552, sponsored by Rep. Tommy Thompson, created the Kentucky Homeownership Protection Center.
“This is a very proactive step that is hopefully going to help people have an option and opportunity to find a means to not have to go into foreclosure, to expose them to different options that are available to allow them to keep their most important and precious asset, and that is their house,” Thompson said.
Last month in Owensboro, Governor Steve Beshear announced establishment of the center, which is administered by the Kentucky Housing Corporation. KHC CEO Richard McQuady says the center’s help line has already received calls from more than six hundred families.
“If somebody is in trouble, they can call toll free, 866.830.7866, or they can contact us through our website, which is ProtectMyKyHome.com,” McQuady said.
He says the center is partnering with a network of counseling agencies, with offices strategically located across the Commonwealth.
“One of my concerns was that we wouldn’t have enough counselors throughout the state, but we are very fortunate in Kentucky that we have a very large network of counselors. In fact, we have as many per capita trained counselors as any other state in the country.”
And while McQuady’s pleased with the progress made so far, a steady decline in Kentucky’s foreclosure rate would make him a lot happier. “But I still think the Homeowner Protection Center is something that’s very important. And so, what I would like to do is in the future, is to have this protection center keep the individual website and keep the partners and it will consist of everything. I mean you’re talking pre-purchase counseling, post-purchase counseling, home ownership education, as well as foreclosure and loss mitigation-related counseling,” he said.
McQuady’s report on the center’s progress was well received by lawmakers in Frankfort. Members of the House/Senate Banking and Insurance committee were particularly impressed to learn the foreclosure rate on homes financed through the Kentucky Housing Corporation…which helps some of the state’s most needy become homeowners…is a mere 1.2%