Rhode Island: Yet to Hit Foreclosures Peak · Apr 26, 11:01 PM by Sharon Reed
Although the number of Rhode Island foreclosure homes in 2006 already exceeded the national average, financial experts believe that the state has yet to reach its foreclosures peak. For the first quarter of the current year, there are already 672 homes in some stage of foreclosure, already a 72 percent increase from the last quarter of 2006.
With 1 out of every 655 foreclosure homes, homeowners of Rhode Island have a reason to worry. Most of these homeowners took out loans from aggressive lenders, usually with adjustable rates. As interest rates soar, many found themselves with mortgage payments that they could no longer pay. To make things worse, home appreciation slowed down and owners are left with little or no equity.
Situations like this should warn buyers of the dangers of creative financing offered by predatory lenders. During the housing boom, many buyers fell victim to interest-only payments and no down payment schemes. These buyers should have understood the risks involved when taking out loans with these schemes.
The high Rhode Island foreclosures rate is also the result of the many subprime loans that defaulted. Subprime loans are loans taken out by borrowers with poor credit records and who can not afford these homes in the first place. Most of these loans are adjustable rate mortgages with rates that are scheduled to reset this year. When this happens, Rhode Island foreclosures rate are sure to soar.
Buyers interested in Rhode Island homes should consider these foreclosed homes. Not only are they sold at a fraction of their true prices, but these homes also provide great return potential. You can own any of these Rhode Island foreclosures by utilizing complete and updated foreclosures listings from brokers like Foreclosure Deals and enjoy even bigger discounts.
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