The National Association of Realtors has issued a statement to express concern “over the rising rate of defaults and foreclosures occurring in many areas around the country, and many Realtors believe that some families don’t understand the risks of taking out ‘exotic’ mortgages.”
Pat Vredevoogd Combs, NAR president, participated in a call this week with representatives for the Center for Responsible Lending and the Leadership Conference on Civil Rights and “urged consumers to make sure they understand the risks and rewards of all types of mortgages before they make a decision on a loan,” according to the announcement.
The Mortgage Bankers Association reported this month that overall delinquencies on mortgage loans rose 28 basis points in the third quarter, to 4.67 percent, and the third-quarter delinquency rate for subprime adjustable-rate mortgages increased by 98 basis points compared to the second quarter and 267 basis points compared to third-quarter 2005.
The Realtor group has partnered with the Center for Responsible Lending to prepare a series of brochures for consumers to educate them about nontraditional and traditional mortgage products.
The latest brochure, released last month, offers tips to consumers on how to avoid predatory lending practices. That five-page brochure is titled “Shopping for a Mortgage? Do Your Homework First.”
Combs said in a statement, “Foreclosures can lead to high vacancy rates, which in turn, can cause all homes in the neighborhood to lose value.”
The Realtor group said in the announcement that foreclosures “are not only a disaster for families but also for communities. Problematic loans are often made in concentrated areas, and high foreclosure rates of single-family homes can seriously threaten a neighborhood’s stability and a community’s well-being.”