Dear Readers,

The months of May and June have traditionally welcomed warmer weather, where people do more  outdoor activities. One of these traditional activities is house hunting. These months bring flocks of home seekers to open houses far and wide. But this year has been a little different. This year has seen a slight decrease in the number of home seekers as the number of home foreclosures around the country and the District has increased. These home foreclosures are cause for concern; not just for the DC Department of Insurance, Securities and Banking (DISB), a regulator for the industry, but also for the nonprofit organizations, the federal government, other consumers and the nation as a whole.

It’s worthwhile to note that large numbers of home foreclosures will lower the market values of surrounding single family homes by .09 percent. Multiple foreclosure compounds this effect, according to a DISB-commissioned study on subprime mortgage lending and foreclosures. In an effort to get to the bottom of the problem, DISB had commissioned this study earlier this year, which concluded that subprime loans in the District disproportionately went to single, low- and moderate-income households in wards 4, 5, 7 and 8. In the District, about 11 percent of all loans in 2005 were subprime. That is, there were more than 4,000 subprime loans given to District residents out of more than 37,000 loans overall. As of May 2008, there have been 366 home foreclosures in the District of Columbia. Compare that to the total for all of 2007, which was 281, and we see a disturbing trend as Americans continue to lose their homes.

That’s why this month’s newsletters will focus mainly on foreclosures and the subprime mortgage market. But beyond this, many consumers are feeling the economic pinch from higher gas prices and an increase in the cost of basic necessities. And as the cost of these necessities increase, you can expect an increase in fraudulent schemes. DISB has focused the rest of this month’s news stories on various fraudulent schemes and other illegal activities designed to separate you from your money.

In this issue of DISPATCH, read about the subprime lending study, what you should do if your health insurance claims are denied, our upcoming events and we have issued warnings on financial schemes. As usual, we hope our content will keep you coming back for more.

Happy Reading!
Office of Communication and Public Affairs