Foreclosures up 34 percent in 2003

[mhr]

Hi All,

The Fort Worth Star Telegram is reporting that home foreclosures are up by 34 % for the DFW metroplex in 2003. Anecdotally, real estate agents tell me that foreclosures are up by 350 % in Plano Texas. Plano is a large suburb just North of Dallas.

The article introduction and link follow:

Foreclosures up 34 percent in 2003
By Andrea Jares
Star-Telegram Staff Writer
Fri, Nov. 14, 2003

Residential foreclosures rose 34 percent in the Metroplex this year, hitting the highest level since the real estate bust of the late 1980s and early 1990s, said George Roddy Sr., president of the Foreclosure Listing Service.

There were 28,164 homes posted for foreclosure in Tarrant, Dallas, Denton and Collin counties in 2003, including those listed for the Dec. 2 auction, according to figures released Thursday by the Addison-based company. In Tarrant County, 8,740 homes were posted for foreclosure this year, 30.3 percent more than the 6,710 homes posted in 2002.

The pace of foreclosures has picked up in the past few years, Roddy and others said, largely because of a sluggish economy that has left more people unemployed or underemployed.

Foreclosures increased 25 percent from 2001 to 2002 and 30 percent from 2002 to 2003, according to the listing service.

Snip ......

http://www.dfw.com/mld/dfw/news/7261023.htm

[UpInArms]

1. remember

"I'm gonna pick up where my daddy left off"?

racing toward the bottom of the pile with the speed of light

[ixion]

2. This is a perfect example of how the recovery has not happened...

I don't buy all this "thing's are getting better" propaganda spewing from the WH. Thing are not better. Things are downright ugly, if things like this and the fact that the job board listings are grim and slim.

very sad. hopefully people will wake up one day. :-(

[tom_paine]

3. Imperial Amerika is moving towards the Third-Woprld with alarming rapidity

Part of that is seperating the "Lower Middle Class", which comprise the Upper Have-Nots from their eductaion and their homes.

Musn't allow the ifneriors of a society acces to Higher Eductaion...

This process will take a coupel egnerations, let's see if the Busheviks can wait that long. I don't think they can and more steps will need to be taken.

[wryter2000]

4. Nationwide figures?

I wish I had nationwide figures on things like this and the bankruptcy rate. I debate with a supply-sider on a bb at work. He keeps talking about GDP. I'd like to counter with what actually means something to people. I can find unemployment easy enough, but I've never found data on foreclosures or bankruptcies.

[Maeve]

7. Found this--partial answer

http://www.ajc.com/business/content/business/1003/28housing.html
<snip>
"I have been in the business 30-some years, and I can't tell you how many times debt has been raised as a problem," said Dan Laufenberg, chief economist of American Express Financial Advisors. "And it's never a problem. Now, if you lose the income to handle debt service -- that would be a problem."

Yet after three years of job losses, that is precisely the problem that has hit many homeowners -- and the result has been near-record levels of foreclosure.

High foreclosure rates are partly explained by the same factors that have made housing so hot, argue some: low interest rates, aggressive mortgage lending and various government programs have made homeowners of an unprecedented number of Americans

Also--from this article:http://www.cjonline.com/stories/111403/bus_suffer.shtml

<snip>"The state's foreclosure rate was slightly higher than the national rate of 1.12 percent in the second quarter of this year. The national delinquency rate on mortgage loans in the quarter was 4.48 percent"

[leesa]

8. So the argument is that too many of us own houses when we shouldn't?

[wryter2000]

10. I actually understand what it means, I think

About a year and a half ago, I was able to buy the house my dh and I had been living in. We managed to get a no down payment loan, but the payments were so high, that I felt really scared we wouldn't be able to make them. That's the sort of thing this article means, I think.

We lucked out and interests rated stayed low while the house appreciated quite a bit. We were able to refinance a few months ago at a much lower rate. Without that, any little financial problem would have thrown us into foreclosure, I'm sure.

[Maeve]

11. Perhaps too many of us own too much house

We were encouraged by realtors to spend far more on a house than we thought we could afford comfortably--we resisted and have a smaller home...and much smaller mortgage than average. Our house payment is smaller than the average rent in our area (and with four kids, one in college, that is a much better position!)

[callous taoboy]

19. Eggs Ackley:

A yuppie relative lives in the Ft. Worth area, says that you drive around these neighborhoods that have million dollar homes and they are all for sale by banks.

[Logansquare]

41. Funding inequities in public education helps this along

People buy too much house in a community with "good schools" because, quite frankly, that's how you get your kid into a good school in this country. As a community becomes more desirable, housing prices skyrocket and so do assessments.

My sister and brother in law are in precisely this situation right now--they moved from Chicago to a western suburb and are struggling to pay off a house that, quite frankly, is just a giant vinyl-sided box on a cul-de-sac. They made some other choices for the kids that exacerbated the situation--like my sister quitting her well paying job and becoming a stay at home mom. She just went back to work, after a nine year hiatus, to a retail job that pays a fraction of what she used to make. They need the money to make ends meet.

[Occulus]

20. no

the argument is that too many people have upside-down mortgages; in other words, they owe more on their homes than their homes are worth.

For those of us who are desperate to own a home, this could be a good thing, but I'll not buy a home until I know that I don't have to live in financial servitude to a bank for the rest of my life to have one.

[AP]

24. Too many got too much money from banks which they couldn't afford.

People should have been buying houses they could afford.

[Occulus]

25. But.... but....

Honey, we just gotta live in one of these McMansions!

There's sooo many to choose from....

(the scene: a young couple just into their careers standfing in a subdivision full of four-bedroom, three-story homes owned one and all by a single area bank. Their clothes are tattered, their car is rusty, but they're contemplating buying a $350,000 McM.)

[Cassandra]

42. $350,000 will barely get you...

a one bedroom apartment in Manhattan.

[Occulus]

43. I know

bleagh.

[dawgman]

47. no the problem is over-mortaging.

People who have no business in a 350,000 dollar homes are buying them just because they can.

[wryter2000]

9. Thank you

:hi:

[Ripley]

5. Split personalities on TV.

Lou Dobbs had a segment about foreclosures, another one about middle class mortgage debt/credit card debt....then poof. There is a story about how swell the housing market is and everyone is buying a home!

Connect the dots jerks.

[Melsky]

6. I'm worried we will see many more foreclosures before it's over

So many people got second mortgages on their homes. What happens when more and more people in the tech sector lose their jobs? I think that housing prices will start declining a lot as foreclosures rise, and it will be a very bad cycle.

[janx]

12. Deja vu...

"hitting the highest level since the real estate bust of the late 1980s and early 1990s"<p>

Like father, like son...

[Fleshdancer]

13. I came pretty damn close to foreclosure.

Fortunately the house sold...2 days before the loan was to go into default. Scary and stressful. But when you experience a job loss right after moving to a new state for said job and it takes 6 months for a good house to sell, well, things turn to crap real fast.

Fortunately my story has a good ending. Others aren't so lucky.

[haele]

26. I know the feeling

A year and a half ago, I had one month left before my house went to forclosure auction; even refinancing wouldn't have saved it - there was a about $25K worth of maintenance that the former owner managed to gloss cheaply over that needed to be done before I could get a either a refinanced mortgage I could afford or get the sale price I needed to be able to walk away with a sufficient nest-egg to try and rebuild finances to buy again later on.
The sudden tripling in utilites costs, having to fix and then replace a vehicle, poor "raise" situation and occasional periods with a week or so without work, and an unforgiving (and stuck in a 30-day late cycle) mortgage of $1200 that was fixing to balloon another $200 by 2004 - as well as the additional late and partial payment fees - if I wanted to be able to afford going to work and eat (even if I used public transportation or carpooled to get there), I couldn't afford to pay the mortgage and utilities. As for getting a second or third job - forget it. I was already exhausted from my primary job which was considered "good wages" in a bad job market. I couldn't afford to lose it and the benefits it gave me to work another 6 hour part-time shift at the AM-PM across the street for the extra $300 a month it might net me in minimum wages - and I don't take in rent-mates unless I know them enough to trust them alone with the critters, a lot of rare books and a lot of inherited, irreplacable goodies.

I managed to get enough out of the sale to pay everything off and pocket about 5K, which, considering the fact I was pushing for a quick sale "as is" and not going for full value - which would have taken more than the three months it took to sell the house, it was considered by the many other people I'm aquainted with who are or had been in my situation to be better than expected.

Just because one's been forclosed on and has either declared bankruptcy or the house is auctioned off doesn't mean the bills owed in that situation have been cleared off the books. Most people still end up owing at least a couple thousand to fees or penalties.

I was lucky, I managed to pay off all the default. And as such, as soon as I get six clear months of credit and have a decent downpayment saved(damn sneaky bills - if it ain't one thing, it's another, and there's always one that's a month behind while the others are being caught up on...), my credit rating will go up enough to get a halfway decent rate should I attempt to go house-buying again.

As a reflection, we might be better served investing in a motor home when we get a bit more saved up; that way, no matter what happens, there's always the option that keeps a roof over one's head even when one's forced to live out of one's vehicle...or the option to rent it out to similarly situated folks if one is still lucky enough to afford a rental.

My folks have indicated that when they sell their Seattle home next year and retire to Albequerque, they'll get a big enough place that should we need to, we can always move in comfortably enough - as long as we get jobs.
We might just take them up on that if the California economy gets too bad.
("Hey Mom, Dad - do you have extra room in the side yard for the 'Bago this year? I've got a part-time job down at the phone company and can pay for the electricity and water we'll use when we hook up...")



Haele

[bahrbearian]

49. Lossing a job cannot be a good ending.

Just a new beganing.

[UB4Me]

14. I read a book about this not too long ago.

It's basic premise was that: 1)aggressive lenders were/are giving no down, no credit check, high risk loans. 2) to owners who bought too much house for VARIABLE interest rates, putting nothing down. 3) for overvalued homes. 4) combined with mammoth fuck ups at government run mortgage lenders (Fannie Mae and Freddie Mac)
Are going to combine to burst bubble in the housing market.

It was really scary reading! I am a construction sub contractor.
The author did say..... when Fannie Mae and Freddie Mac do go south, it's time to get out real estate. If you are way upside down on your house note, maybe it's time to look back at renting.

The signs are ominous.

[AlabamaYankee]

15. Are banks getting more aggressive?

It seems to me that the number of houses listed for foreclosure/sheriff's sale is much higher here in Alabama than it was in Central Pennsylvania when I lived there. Twenty-five years ago a colleague was in financial trouble and the bank worked with them so they could keep their house and work through the problem. Now, it seems like the bank - or whatever national mortgage company the bank has sold the loan to - initiates foreclosure proceedings at the drop of a payment.

[AP]

22. I read that a lot of banks aren't foreclosing when they would have in...

...the past, because they don't want to issue reports that might hurt their stock prices.

Also, the NYT reported a few months ago that all the Fed agencies are trying to work together to keep the real estate market afloat.

[sendero]

16. At the risk of sounding...

... unsympathetic, people should use more sense when making a purchase as important as a home.

Just because someone will loan you the money doesn't mean you should borrow it. The unfortunate fact is that things like PMI, which were intended to shelter lenders from rare occurances, is now used to cushion them against bad loans to the point where they don't really care if the loan is viable or not.

If you don't have 5% down and six months living expenses in the bank, you should not even be thinking about buying a house. Unfortunately, people are so eager to have the trappings of "succes" they allow themselves to make bad financial decisions that will haunt them forever. It's too bad.

[shrike]

17. I know a lot of people in law enforcement and a few building inspector

types who tell me that many of these expensive houses are luxury items their owners can ill afford. You walk in and the owners are living in a nearly-empty house: just a TV and some lawn chairs.

[Melsky]

18. I've been in houses like that

I used to be a real estate agent in San Diego. I worked for a guy who specialized in super expensive homes. A lot of times in those huge 4000+ square foot homes most of the rooms were not even used. Even if they were furnished they were usually dusty and uninhabited.

[Occulus]

23. home ownership ought to be a right....

as in, once you buy a home, nobody can take it from you. For any reason.


Banks just love to create the homeless, and they have no scruples about doing so.

Got kids? Tough. Homebound with a disease? They don't care.

All they want is their money. Personally, I hate money. I hate what people do with it. I hate the evil it creates. I hate the darker side it brings out in people.

What I hate most about money, though, is that it seems to me... the darker your heart, the more money you have.

The hearts of banks, bankers, loan officers, etc... are utterly black. In fact, the hearts of these people and institutions suck light in.

I hate money, I hate not having, but most of all, I hate being judged for not having enough of it. I've been renting all my life, and I look back at the tens of thousand of dollars I've spent doing so as an utter waste...

Like I said earlier, I'd love to own a home, but I won't do it until I know that I won't live in debt for the rest of my life by buying one.

[sendero]

29. well....

Once you *pay* for a house it is prety much yours. Unless you don't pay your property taxes :)

Problem is, getting a mortgage is not the same as owning a house.

[Occulus]

44. Tell that one to the people

who liveD around the Texas Rangers' new stadium.

With a capital 'D' for emphasis. Once you own your home and your property, it can indeed be taken from you, even if you have broken no laws of any kind.

[haele]

27. Easy to say...

Especially when dealing with the luxury houses...

But the problem I've been seeing in So. Calif. is the number of lower middle class people who bought what was considered a reasonable house with 5% or 10% down or with the VA "No-No" or HUD loans - and have had their jobs and income "downsized" 5 or 10 years after buying, with 20 + years more to pay. Yes, I had the six months salery, etc, etc...

In 1994, with careful research, 5% down, on a VA 30 year loan, I got what was considered a very reasonable 3 bedroom tract type house for $132K. I was thinking of a perminant place, a home I could grow old in and take care of by myself - where I could also take in a rentmate occasionally if I needed to or if I decided to marry, could comfortably if snugly handle a small family.
In 1999, I refinanced to $155K because of an unexpected major financial issue and again, picked the best rate I could get - a 7% fixed 30 year due to a burp in my credit rating (due to a temporary downsized/unemployed status that quickly ate up the savings I had, as well as a 401K I had rolled over and cashed in).

Again, I thought that any current financial problems would be temporary, the refinance took care of the majority of them, and if I was living paycheck to paycheck then, it would be taken care of when I got my expected merit raises and promotions...

Then Shrubbie got into office. Utitility costs/cost of living soared. Promotions and raises were effectively frozen as competition for contracts grew fierce and jobs dwindled. I ended up leaving one job and taking another, starting below the position I had worked my way up to in the other job. Still "good" pay with benefits, but a quarter of what I was making before, and very little OT to offset any days missed due to lack of work.
Any little thing - like critical car repairs, or a broken water main between the meter and the house after the 3 year home warrenty runs out, can put you seriously back, especially if you're living paycheck to paycheck. I got stuck in a 30-cycle, then a 60-cycle with the mortgage...
So, the house ended up going into forclosure while I made the hard decision to try and quick-sale it so I could pay it off and save enough money to move into an apartment I could afford. As I said in another post, I was lucky. I not only paid off all the fees and penalties with the sale, I walked away with $5K and an almost clean credit slate.

And that's not an unusual situation here in Southern California.

Many forclosures may be due to someone buying upscale when they should be looking in terms of affordability and looking at the future, but more and more, forclosures are due to just plain bad luck, and the rising cost of living.

Haele

[AP]

21. This is without an interest rate rise, by the way. If interest rates go up

say 2 points on a 30 year, 200K mortagae, that could be an increase in a mortage by 270 bucks a month.

Lots of people don't have that kind of margin in their budgets.

[UpInArms]

28. RELATED ARTICLE: Home foreclosures skyrocket in Jefferson

http://www.courier-journal.com/localnews/2003/11/14ky/wir-front-foreclosure1114-16584.html

The number of home foreclosures in Jefferson County has nearly tripled since 1996 and shows no signs of slowing.

While no section of the community is immune — people are losing $300,000 and $400,000 houses in Cherokee Triangle and Lake Forest — most foreclosures are in western Louisville and, to a lesser degree, portions of south Louisville.

In 1996, 437 foreclosure cases were filed in Jefferson County Circuit Court. Last year that number soared to 1,262. And through September of this year it already has reached 1,359.

...more...

[hatrack]

30. "Home Equity Loan" - isn't that a soft and soothing sound?

"Home Equity Loan" - as gentle and comforting as a toasty flannel blanket covering you from neck to knee as you sip cognac before a roaring fire, your faithful dog curled up on the persian rug next to your chair, your faithful wife bringing you another snifter.

Contrast that with "second mortgage" - SECOND MORTGAGE.

No wonder the financial industry laundered the phrase!

[KayLaw]

33. My!

What an interesting post. Rather like being hit in the face with the ice water left in the champagne bucket, but good. I never thought of it that way but you're so right. Something like that should be on billboards everywhere!

[sendero]

39. up until a couple years ago...

.... in the state of Texas second mortgages could not foreclose, i.e. the house itself was not really collateral on a second. The banks lobbied and lobbied and finally got that law changed.

Home equity loans, except in extreme emergencies, are a very bad idea. The idea is that you will own you home someday, if you keep borrowing against it you never will.

There was a time long ago when the conventional wisdom was "buy all the home you can afford" because housing inflation was almost guaranteed. I don't think that is a very good idea any more.

[JackDragna]

31. Meanwhile..

..sales of black moustache wax, monocles and black top hats are up.

[Beetwasher]

32. Don't forget Ivory Backscratchers

n/t

[hatrack]

36. And don't forget spats!

Whether you really got off on Scrooge McDuck diving into his money vault or want an authentically J.P. Morgan appearance when laying off employees and closing factories, you just can't beat spats!

[TEXASYANKEE]

34. No market, as well.

Houses simply aren't moving in the metroplex either. Pick a neighborhood, from rich to lower income, houses are sitting on the market. Not a good sign.

[0007]

35. This time next year it will be 60 percent. God, I hope I'm wrong.....

[wabeewoman]

37. I think Klugman has talked about this too

There are a combination of things you have all mentioned causing these foreclosures. I know we went to what we thought was a conservative bank for refinancing and they practically pushed money on us. The loan officer offered us much more than we wanted. Then when we bought another home, they just did a drive-by appraisal. It used to be much harder to get a loan. What is going to happen to the banks when they have all these loans fail? And I understand they can loan a much higher percent of the money they have deposited than they used to. Its pretty scary-what could happen. And knowing bush and co. have no clue doesn't install confidence.

[lostnfound]

38. Hey Republican Bankers: This is Trickle-Up Economics

Eventually those personal bankruptcies and foreclosures will hurt the bottom line somewhere, right? (Never as bad as the flesh-and-blood families suffering them, but maybe enough to be noticed at the banks.)

[mbperrin]

50. Actually, it's Corporate Welfare and a Garage Sale for Big Banks.

When the smaller players start falling off, the govt will close those banks, give the assets to large banks who agree to reopen them; all the bad loans will be taken over by the government (that's you and me!), paid in full, then the properties will be auctioned off for pennies on the dollar to folks with CASH to pay.

End result? Much larger holding companies with higher profits, and more property converted from ownership to rental by landlords with cash.

No tinfoil here - check out the Reconstruction Finance Corporation from the 80's when we did all this the first time!

[lostnfound]

51. Uggh! I should have known better n/t

[Noordam]

40. And IF the rates go up

Funny thing about Banks,, if the current interest rate is 5% and your rate is 8% and you are late on a payment, no problem they will work with you....

On the other hand

If your rate is 5% and the current rate is 8%, do not be one second late on your payments.


And guess what folks. The interest rates have only one direction to go from here.

[UpInArms]

45. RELATED ARTICLE: (Ohio) More losing houses to foreclosure

http://www.morningjournal.com/site/news.cfm?BRD=1699&dept_id=46371&newsid=10519155&PAG=461&rfi=9

This year there are 1,166 homes scheduled to be sold, sheriff's Lt. William Davis said.

The sheriff's department civil division is responsible for selling homes that have been foreclosed. It appraises the homes, advertises them and sells them at auction after the court orders the sales, Davis said.

''I know it's steadily gone up, but this has been a large increase over the last year,'' Davis said.

<snip>

''What we are seeing there continues to be an upward trend around the state in foreclosure filings and sheriff's sales,'' said study director and co-author Amy Hanauer.

In 2002, Lorain County Common Pleas Court saw about 1,442 foreclosure filings, according to a forthcoming report from Policy Matters Ohio. This is compared to 475 local foreclosure filings in 1994, the group found.

Lorain County Sheriff Phil R. Stammitti said he thinks it is a sign of the economy.

''If you don't have the money coming in, you can't make your mortgage payments or car payments,'' he said. ''It's a sign of the time in Lorain County. Things are tough.''

...more...

[catmandu57]

46. We are fixed pretty well

my wife and I. We have a modest little house, in small town missouri, our mortage is cheaper than comparable rents in the area. I don't know if either of us will see the end of this mortage, but, we call it home and are happy here.
It's the kids next door who worry me, they just had their first child, both have new cars, and the house is way too big for them, A family of five or six could live comfortably there. I worry that they have dug a deep hole for themselves, I hope not.

[davsand]

48. A lot of people overbought.

They had no idea how much they were over extending themselves.

I had a guy sit in my office to file an appeal on his property taxes and he lived in a brand new 4000+ sq ft house. It was lovely--and an archetectural joy--but it was also costing him a huge amnout per month. When they got the first full prperty tax bill they went into panic mode. They didn't escrow taxes and they had no idea how much they were gonna run!!

I explained to him that I couldn't lower the taxes simply because they couldn't meet the payments and he was on the verge of tears. He explained that they had planned to live there "forever" and have a family... There was nothing I could do for him.

I saw appraisals that were way over the value of the properties, IMO. I saw appraisals that didn't even describe the properties correctly! When you couple bad appraisal pracitces with lending on a tight margin you are headed for a meltdown of a severe kind.

I don't want to be a crepe hanger, but this is only the start of it. As those bad loans come back to the banks, they are coming back at a loss to the lenders. Couple that with a "Home Equity" loan to consolidate the credit card bills and suddenly the banks are holding a property that they can't get anything out of when they resell it.

We all need to be very afraid.

Laura

[BlueCollar]

52. I saw the article

and have to wonder how right-wing talk show host Darrell Ankarlo at KLIF570 talk radio can keep spouting about a "recovering economy"

There's been a lot of talk in Texas lately about how the school taxes are falling short of meeting funding requirements and that another "special" session of the Texas Legislature wil have to address the issue.

I'm paying over $2000 a year now, and they're escrowed and my mortgage payments have risen steadily. I can still afford the payments even though I took a 17% base-pay cut in April in order to participate in the "bankruptcy-prevention" plan.

I'm fortunate...I have a good union job that pays well...and revolving debt is minimal.

Housing construction hasn't slowed here in the metroplex...they're still building like gang-busters and I assume people are still buying.

I think fore-closure numbers are a real indication of the state of the economy and wish the Dem leadership would talk it up.

Texas and the metroplex are supposed to be doing well in contrast to the Nation? Wonder what the numbers are in the Rust Belt?