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What’s With Foreclosure in Virginia Beach?

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Foreclosure has been an issue throughout the United States for many years. In fact, Virginia Beach foreclosures in neighborhoods like Colonial Place and Larchmont have increased by at least 23%. This jump has been caused by job loss, increased interest rates, and tight credit. In the end, foreclosures negatively impact the local economy as well as the people involved.

Virginia Beach’s Foreclosure Crisis

Along with cities like Norfolk, Chesapeake, and Portsmouth, there are many cities throughout the region with increasing foreclosure rates, including Virginia Beach. The foreclosure issue in Virginia Beach is not improving as the state of our economy and price inflation worsens. Financial ruin and poverty have increased as well, as many people are losing jobs on top of losing their homes. This affects low-income families especially.

The Role Of Subprime Loans

What changes in the economy cause foreclosures? Let’s take a look. 

Subprime loans are loans that are given to home buyers who don’t have good credit scores. Because of this they are not easy loans to obtain. Plus, they come with a higher interest rate. This helps to ensure these loans are paid on time, and to get people on track to a better credit score. With the possible long-term benefits of these loans, however, come consequences if not paid on time, of course. Because there is a higher interest rate, if a buyer were to take this loan lightly as if it was a regular loan, they would end up paying more interest than they would with a regular loan. This is where issues arise, and where debt can double, leading to foreclosure. 

The Role Of The Housing Market Crash

History has a big impact on future generations. An example of this would be the Housing Market Crash in 2008. This was a dark time for Virginia Beach residents, where home prices decreased by almost 30%. The crash was set off by multiple things, such as subprime loans, lax regulations, and increased debt levels. The net effect of these factors were decreased home values, and many people faced foreclosure. Businesses closed down and people lost their jobs, as the crash affected the local economy as whole.

The Role Of Unemployment In Foreclosure

Unemployment is one of the biggest drivers of foreclosure. In 2017, foreclosures increased by 23% in Virginia Beach. While there has been a rebound since then, there are still people struggling to keep or find jobs due to the outbreak of COVID-19. The pandemic caused many businesses to shut down which led to widespread unemployment. Understandably, mortgage payments can easily be missed due to lack of income.

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The Role Of Rising Mortgage Rates

As each year passes, so do the record prices of products. The cost of living and product prices increase every year. A pack of gum, for example, cost about .75 cents in the early 2000’s, and now costs as much as $5.00. Rising mortgage rates in Virginia Beach have caused many people to lose their homes to foreclosure, as they are unable to cover the price increase. Mortgage rates are constantly changing, and could easily alter plans for home buyers. This change in costs not only affects low-income families, but even middle-class families. 

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Get Help Today!

With our economy still seeing prices increases for homes, products, and subscriptions, foreclosure continues to rise; and likely will in the near future. Factors such as an increased cost of living, lower amounts of affordable housing, and increased unemployment have resulted in an increase in foreclosure, particularly in areas like Virginia Beach, Norfolk, Portsmouth, and Chesapeake. Certain government programs can help homeowners pay off their mortgage or increase their credit score. Don’t wait to ask for help! If foreclosure seems inevitable, call Fast Homebuyers today for information on selling your home. We’ll get you cash fast for your house in as-is condition.

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