Nearly 200 Foreclosed Homes for Auction in Muncie

Nearly 200 foreclosed homes for auction in Delaware County, Indiana will be sold off to the public at a sheriff’s sale in August and in September, according to the county sheriff’s office.

The number of homes for auction indicates the continued foreclosure problem in the Muncie area. Of the approximately 1,000 houses sold in the area since January, nearly 50 percent were foreclosures.

Since January through the September 16 auction, the sheriff’s office has already processed 539 foreclosed properties for auction.

In September 2006, the Consumer Federation of America stated that Delaware County was tenth in a ranking of communities that had the highest percentage of subprime mortgage loans, which were largely blamed for the collapse of the housing market.

Over half of refinanced home loans in Muncie were subprime mortgages, the CFA reported. Subprime loans were the high-interest loans provided to borrowers with poor credit ratings during the housing boom.

Job losses, increased rates for ARM loans, declining home prices and dropping home sales further pushed up foreclosures in the county. According to the sheriff’s office, its sales of foreclosed homes increased from 411 units in 2003 to 797 units in 2008.

Since January 2009, the sheriff’s office has already sold 228 foreclosed homes. It has also hired a real estate firm in Southern Indiana to conduct future sales because of the rising number of foreclosed properties being sold.

The sheriff’s sale in August involved 195 foreclosed properties while the sheriff’s auction to be held in September will sell 115 foreclosed homes.

Elizabeth Costello, a lawyer working for bankruptcy clients, said she often encounters the problem of foreclosure in her work. She said that the pace of foreclosure has not slowed down compared to 2008.

To help reduce foreclosures across Indiana, state Attorney General Greg Zoeller launched a foreclosure prevention scheme that involves hundreds of lawyers throughout the state. Volunteer lawyers would represent homeowners in their settlement meetings with their lenders.

Zoeller hoped that the settlement conferences would help the approximately 5,500 homeowners who were hit with default or foreclosure notices in June.

However, some realtors including Muncie agent Cindy Welch-Landis have doubts about the program. She said that many distressed homeowners also have other big debts, such as credit card debts and other household bills.

Nevertheless, some lawyers like Costello are optimistic about the initiative. She explains that the most essential factor in the success of the program is getting a person of authority from the mortgage company to participate in the settlement meeting.

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