Foreclosure of Residential Houses have Increased by 51% in Pima County
Foreclosure of residential houses has gone up by 51% in Pima County with one out of five homeowners holding sub-prime mortgages facing grave risk. For buyers it is good news that the real estate market is cool as banks are offering huge discounts. But for homeowners it is sad tale of woes.
In the first three months of this year there have been 1,427 foreclosure postings marking 51% from 2005 during the same quarter according to the findings of RealtyTrac. The worst victims are those who took sub-prime mortgages. The latter carrying high interest rates were made available to those with low credit counts.
A non-profit national organization, The Center for Responsible Lending is agitating against predatory practices of lenders. It apprehends that over one out of five borrowers who contracted sub-prime mortgages during 2005 and 2006 are at grave risk of losing their houses.
As per the findings of Tucson Citizen, foreclosures are concentrated in the poor localities of the metro region – generally those near highway intersections.
Among the 420 metro regions of USA, Tucson has been ranked 19th by the center. Phoenix, Prescott. Yuma and Flagstaff ranked 26th, 51st, 250th and 368th respectively. Six years previously the foreclosure rate in sub-prime mortgages was less than one out of every ten houses.
The increase in foreclosures n Tucson is less than Maricopa County and Pinal County as per the findings of RealtyTrac. In Maricopa and Pinal counties it jumped by 108% and 233% respectively.
Moody’s Economy apprehends that Tucson will experience the 7th biggest decrease in house prices. It will drop by 13.4% from its highest point during the first three months of 2006. Moody explained that the sharp fall is because of a rush of houses in the market that are both overvalued and unaffordable in the regional market. The drop in house prices show that many of the homeowners could have avoided foreclosure by either refinancing or selling previously when the going was good. But now they do not have any equity on their houses as prices begin to tumble.
What is happening in Tucson mimes the national scene. a report compiled by Congress’ Joint Economic Committee – Sheltering Neighborhoods from the Sub-prime Foreclosure Storm, reads, “Over the past several months, it has become increasingly clear that irresponsible sub-prime lending practices have (been) contributing to a wave of foreclosures that are hitting homeowners and rattling the housing markets.”
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