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State, county see record sheriff's sales
"We know this is a huge problem," said Carol Gifford, spokeswoman for the Pennsylvania Department of Banking. But, Gifford said, officials don't know why.
Relaxed standards for mortgages and more aggressive collection of late taxes are two of the reasons offered, but "I can't say we've proved anything yet," she said.
The banking department opened an investigation and hopes to have it finished by January.
The Sept. 7 Allegheny County sheriff's sale could see 1,141 properties on the block as the result of lenders' foreclosures, unpaid taxes or court judgments. If that number holds -- and about 27 percent of properties are withdrawn from the sale each month because of settlements or bankruptcies -- it will be a one-month record, according to Sheriff Peter R. DeFazio's office.
It also would mean the number of properties taken to sales this year (7,852) already is nearly twice the record total (4,377) for all of last year. About 3,200 properties actually were sold last year, most of them back to lenders.
The numbers are increasing for a variety of reasons, making it a complex problem to attack. That wasn't the case two decades ago, when Allegheny County residents were losing their homes mainly because of the collapse of the steel industry, said Barney Oursler, a coordinator for the Mon Valley Unemployed Committee.
Several forces seem to be driving the numbers up, according to Oursler, consumer advocates and banking officials:
State Sen. Jane Orie, R-McCandless, unveiled legislation last week designed to curb what she calls "unscrupulous predatory lending practices." The bill would require lenders to consider borrowers' ability to repay, limit lenders' fees and insurance requirements, and would regulate the amount of interest lenders charge.
Allegheny County, municipalities and school districts are cracking down on delinquent property owners, said Mike McCabe, an attorney for the county and several school districts.
Governments and school districts are becoming more aggressive because of tightening budgets and a new state law that allows them to charge legal costs to property owners.
Homeowners who have taken on heavy debt burdens to buy homes are just one bad break away from financial disaster, said Bernard Rubb, a Pittsburgh lawyer who represents property owners. If they get sick, lose their jobs, have to take a lower-paying job or get divorced, their homes are in jeopardy, Rubb said.
"It's either put food on the table and not pay the mortgage, or pay the mortgage and then they're starving to death," he said.
Said Oursler: "It's a problem for many homeowners where the only solution is to get out (of their homes) while they have an asset."
The number of sheriff's sales, Rubb predicted, is "going to get worse."
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