Foreclosures Jumping High In Austin

January 22nd, 2008

The number of residential foreclosed houses shot up by 56% in comparison to the previous year in Austin. Lenders became active against delinquent borrowers and served them foreclosure notices. This report has been released by Foreclosure Listing Service Inc., based in Addison. For the Tuesday February 5^th auctions a total number of 832 foreclosures have been listed. In February 2006 the number was 535. Williamson County topped the list with an increase of 98%. Travis County rose by 38% and Hays by 57%.

In Central Texas six counties broke records in foreclosure listings commented George Roddy who is the vice president of FLS. During the first two months of 2007 the postings went up by 21% as compared to 1,389 of 2006. Roddy explained that the figures should be interpreted bearing in mind that the January auction was on New Year’s day. This would account for about 15% of the February postings. Most probably the lenders thought that it was high time that the borrowers were taken off the ledgers. Roddy opined that the time is not yet ripe to say whether the rise in February is just an aberration or a precursor of times ahead. Only careful analysis of the following months will bring out the true picture. One thing is clear that the foreclosure waves will continue to remain high with occasional outbursts of froth and foam.

Foreclosures are nothing new in the world of mortgages and finances. What is new is the unprecedented numbers. It is wreaking all round havoc and ripples are felt in stock markets across the globe. The accusing finger points to the sub-prime market. It was created to accommodate those who did not qualify for prime loans. For the latter a good credit record and steady income proof was required. Moreover the amount would be in proportion to the income. In the sub-prime category anybody with a pulse was advanced a loan. The lenders were motivated by commissions and investment interests. So they peddled their ware to gullible borrowers. Properties were falsely valued to get a heavy loan amount and even without down payment people walked into dream houses. But when the interest began to rise – double and treble after first few years of honeymoon, the borrowers could not keep it up. They failed and the result was foreclosure. Today the epidemic is creating such a stink from decomposing abandoned houses that none are spared – neither the king and the court nor the subjects.