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RALEIGH Foreclosure filings in Mecklenburg County through October this year shot up by 44 percent compared with the first 10 months of last year, while the increase in the Raleigh and Greensboro areas remained flat or even declined.
Mecklenburg in recent years typically has racked up higher increases in foreclosure filings than most of the other metropolitan markets in North Carolina, but officials at the state Office of the Commissioner of Banks in Raleigh, who oversee mortgage regulation, are alarmed at the size and dimensions of the difference that has emerged in recent months.
Mountain and coastal counties, with their large second-home and vacation rental markets, have endured high foreclosure rates almost since the recession began.
"The mountains and coast are still up," said Deputy Commissioner of Banks Mark Pearce, "but now you're seeing a difference in the geographic regions in between."
While Mecklenburg's filings were escalating, the foreclosure filings in Guilford County, which includes Greensboro, dropped 11.3 percent from January through October, compared with the same period last year. Neighboring Forsyth County and Winston-Salem were down 6 percent. Wake County, which includes Raleigh, rose by 3.3 percent.
"There are clearly two different economies going on," Pearce said.
Foreclosure filings mark the start of the foreclosure process. Many homeowners will work out repayment plans or catch up on payments. Others will lose their home to final foreclosure sales.
Kerri Roseman is a program director at Prosperity Unlimited in Kannapolis, a nonprofit that provides housing counseling. Her office's caseload of clients facing foreclosure has doubled, from 286 last year to nearly 600 this year.
"Some of them, their interest rates have adjusted and they're not making enough money (now)," Roseman said. "Others, it's medical. Others, it's separation or divorce. But most of them are because of job loss."
The Charlotte area economy relies heavily on financial services, which have taken a beating from the mortgage meltdown and stock market bungee-jump.
Every morning when Laurie Talbot walks outside, she sees four houses, in foreclosure or close to it, lined up in a row across from her east Charlotte home. She bought what she thought was her dream home in 2006. Since then, the face of her neighborhood has changed.
Some houses in her community off Harrisburg Road have sat empty for years. Others have been rented out to people who don't care as much about the property owned by landlords who live out of state, Talbot says. Crime has gone up since then.
Her home is in Stewart's Crossing, one of 10 communities racked by high foreclosure rates and, later, rising crime that were profiled by the Observer in 2007.
"There've been some break-ins," Talbot said. "At one point, both houses next to us were empty, and the ones across the street. It's scary because you have no one looking out for you."
The houses have remained empty, but things have gotten better. She's noticed more police patrols, she says, and made friends with neighbors.
Still the property values have gone down and she and her fiance, Bob Johnston, say they can't move.
"We wouldn't get as much for it as we put into it," he said. "If the lottery comes through, we're gone."
Mecklenburg's unemployment rate, 11 percent, is higher than Wake County at 8.3 percent, according to state figures. Mecklenburg has a higher percentage of the population below the poverty level than Wake, 11 percent versus 8.5 percent, and a lower median income, $56,100 compared with $61,700, according to census data.
Wake is home to the state capital and the Raleigh-Durham area includes a cluster of major universities, helping create a more stable job base.
Tony Crumbley, vice president for research at the Charlotte Chamber, highlighted Charlotte's once-thriving real estate market and its higher percentage of lower income residents. "Too many people were sold houses in Mecklenburg County who couldn't afford them, more so here than there," Crumbley said.
When the comparison slides away from Wake County, though, the explanations don't hold up as well.
Guilford County depends heavily on manufacturing, another hard-hit slice of the economy. Its unemployment rate is the same as Mecklenburg's, while its poverty rate is higher, 15.5 percent, and median wage is lower, $46,500. Yet Guilford's foreclosure filings decreased compared with last year.
What Guilford did not experience was the sort of rapid build-up of affordable, entry level homes that Mecklenburg saw, partly through Indianapolis-based C.P. Morgan's quick entry and expansion to No. 1 in the market by 2007, said Chuck Graham, of Newton Graham Consultants. Graham works with the real estate and development industries. A large share of the first-time, subprime mortgages that drove the economic collapse flowed into those homes, he said.
"Charlotte had a higher mix of affordable housing" than other areas, Graham said.
Morgan closed its Charlotte operations in February.
In short, the other metropolitan areas suffered on either the supply or demand side of the real estate-driven recession, while Mecklenburg was pounded from both directions.
The banking commission's office, which launched a counseling program in September to help prevent foreclosures, is increasing its focus on Charlotte, trying to increase familiarity there with the office's offer of help. Pearce said foreclosures obviously help weaken the economy now but also echo into the future for the families involved.
"They may be unable to own a home for 10 more years; the kids and schools suffer," Pearce said, adding that foreclosure pushes down home values. "It affects everybody in the neighborhood who is making their mortgage payment." Staff writers Stella Hopkins and Cleve Wootson contributed.
