Friday, August 18, 2006

Record Foreclosures In North Texas

A pair of reports from Texas. "More and more North Texas homeowners are in big trouble. Residential foreclosure postings are at record levels, up 30 percent from a year ago. More than 3,800 houses are threatened with foreclosure next month in the Dallas-Fort Worth area. And for the first nine months of 2006, more than 28,000 home foreclosure postings have been recorded."

"'This is bringing back nightmares of 1988 and 1989,' when thousands of Texas homeowners lost their properties during a regional recession, said George Roddy, president of Addison-based Foreclosure Listing Service. 'The average number of postings in 1989 was about 2,000 a month,' Mr. Roddy said. 'And that is when we saw a massive devaluation of residential properties in some areas.'"

"This time, however, instead of a recession, poor financial planning and rising living expenses appear to be putting record numbers of North Texans out of their homes. 'Some of the mortgage originators are not going over the worst-case scenario with borrowers,' said Gary Akright with Dallas' Dominion Mortgage Corp."

"For September's foreclosure sales, the number of home postings is up 32 percent in Dallas County and 36 percent in Collin County. Denton has a 38 percent increase. The increases are higher in Rockwall County, up 68 percent."

"Housing analysts worry that if foreclosure rates stay at current levels, the overall housing market will suffer. 'If this continues, it's going to have an impact on values,' Mr. Roddy said."

"So far, lenders aren't deeply discounting the foreclosed homes they resell in North Texas. 'We are not seeing distress sales yet,' said Ted Wilson with Dallas housing analyst Residential Strategies. 'But I think it's something we have to watch.'"

"Mr. Wilson said home loan defaults could grow next year when borrowers who have adjustable-rate loans get hit with higher interest rates. 'When these loans adjust, there will be a lot of homeowners who will not be able to make their payments,' he said."

"Tarrant County home foreclosures have reached their highest numbers since the real-estate crash of the late 1980s, according to figures released Thursday. The 1,220 homes posted for the auction block in September are nearly a quarter more than the 983 a year ago."

"The latest figures are nearing the numbers seen during the crash, said Jim Brown, who owns All American Title Services and has watched foreclosures for more than 30 years. 'It’s starting to hit those levels,' he said. 'It’s getting really scary.'"

"Homeowners may try to stave off debt by paying increased mortgage costs and bills while charging groceries and gasoline on their credit cards, said Carey Ebert, a Hurst bankruptcy lawyer. 'At that point, you’re just moving deck chairs around on the Titanic,' she said."

"When finances go awry, sometimes their mortgages go upside-down, when the homeowners owe more than the house is worth. The homeowner can’t refinance it without owing even more money, and thus has little incentive to save it from the auction block."

"'It’s completely widespread; you’re seeing it in all neighborhoods,' Brown said. 'You’re seeing it in Colleyville, in Southlake.'"

"Ted Wilson, a partner at Dallas housing analyst Residential Strategies, points out that although the new foreclosure numbers are eyebrow-raising, there are still buyers at the foreclosure auctions. During the real-estate crash, there were few, if any."


At 10:25 AM, Blogger OC BEAR said...

Texas always seems to have Foreclosure problems. It is due to their Property Tax's, some areas are at 4% with 2.7% being considered average.

When I looked at buying something as an investment in San Antonio in 05 it wasn't cash flow positive with 30% down due to Tax's and upkeep. The -praying for a hail storm to replace the roof via your insurance before it falls apart from the elements every 5-10 years-, did not sound like a healthy margin to me.

When I say cash flow positive, I am of course refering to traditional Investment Properts Lending. Sme day soon (in the next 4 years) it wll be the only type of RE investment loan made.

At 6:48 PM, Blogger Chip said...

I might have been interested in a place in Texas until TxChick noted, in your housingbubble blog, the property taxes for a house in Houston. Whoa -- as OC Bear notes, they are noticeably higher than in Florida, and Florida's proerty taxes are why I'm leaving.


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