The Foreclosure Report

Memphis Sales Almost Equal To Defaults

The Memphis Business Journal from Tennessee. "The old adage that if you give someone enough rope, he'll hang himself seems to be behind the high rate of foreclosures in the Memphis area, according to the results of an online survey."

"A recent story published in Memphis Business Journal found that there was one foreclosure for every 1.06 homes sold in 2006 in the Memphis MSA. Specifically, there were 19,738 homes sold in 2006, and there were 18,155 residential foreclosures last year."

"MBJ asked its online readers to pick a reason for the high rate of foreclosures. The survey, which provides an unscientific snapshot of reader opinion, received 202 votes. Most respondents, 59 percent, blamed the foreclosures on creative home financing that is aimed at marginal homebuyers, while 39 voters (19 percent) put the blame squarely on the shoulders of uneducated homebuyers."

"A smaller number of respondents, 8 percent, blamed unethical mortgage brokers. Another 5 percent of voters said the economy is to blame for the number of foreclosures. And 6 percent of voters said something else was to blame."

"Comments left by voters included the following: 'Creative financing is bad, but these people need to be able to 'live within their means.' Too often they are allowed to purchase more than they can afford.'"

"'Too many financially uneducated people have been caught up in these creative financing schemes then been talked into refinancing and taking out what meager equity they had built up.'"

posted by Ben Jones @ 12:54 PM