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Associated Press

RALEIGH— North Carolina’s tough mortgage laws, enacted almost a decade ago, have helped the state weather the foreclosure crisis better than most.
But even with additional laws enacted last year to curb what critics call mortgage industry abuses, North Carolina can expect the number of foreclosures to grow, enveloping not only low-income people, but also middle-income families who bought more house than they could afford.
Some of those in trouble have cleared out their 401(k) plans and are using their credit cards to make house payments, said Louise Mack, who provides free housing counseling through a nonprofit group in Cabarrus County.
“The majority of the people are in mortgages that they should have not gotten in,” said Mack, whose organization, Prosperity Unlimited, took 80 new clients facing mortgage delinquency or foreclosure during the last three months of 2007, double the number the year before. “They bought too much house than they could have afforded.”
When the General Assembly approved a predatory lending law in 1999, it was hailed as a model for the rest of the country.
The law barred companies that offered certain high-interest mortgages, also called subprime loans for people with bad credit histories, from requiring unreasonably high points and fees. Borrowers couldn’t be penalized for paying off the loan early or be forced to make balloon payments. (more…)

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