Foreclosures Surge In North Texas

February 19th, 2008

In North Texas foreclosures raced to over 27% creating a record for the first quarter of 2008. Over 4,100 Dallas-Fort Worth are listed for foreclosure sales in March. For this quarter lenders have registered for sale more than 13,000 residential units. It indicates a rise of 21% over the previous year. Housing experts do not foretell any turn around of hope in the future.

In 2007 about 1.25 million houses across the country ended up in foreclosure and the number is expected to be more in the current year. Mortgage problems coupling up with economic slump have combined to create this untenable situation. Dallas-Fort Worth registered over 43,000 foreclosure listings in 2007 making it rank 11^th in the national statistics.

Counting the pending foreclosure sales for March it appears that Denton County foreclosures have gone up by 42% since the previous year. In Tarrant County the increase is by 28% and in Dallas County by 25%.

Most of the owners who are facing foreclosures are in trouble because they cannot afford the increased sub-prime interest rates. Roughly 50% to 60% of the foreclosures result from forced sale of the units. Sometimes the sales are delayed or the a new agreement is reached upon between the borrowers and lenders. Housing experts apprehend that if the real estate market continues to fall then many borrowers will just walk away from the house. Lowering of mortgage rates will not be of use. The falling of house values mean there is no equity left for refinancing. As such there is no point in continuing irrespective of the rate. This is exactly what has happened in a number of foreclosed houses in Dallas Fort Worth. It calculates to about 20% of the properties (if not more) being under the water level.

The sub-prime mortgage was created to cater to those who could not qualify for prime loans because of modest income and negative credit ratings. Sub-prime loans were more often than not ARM’s - the interest floating over a period of time. When the borrowers become unable to meet the increased payments the lenders foreclose and take over the house. The spiraling numbers have caused inconvenience to the lenders and to the tax collecting authorities. Too many houses foreclosed means a huge expenditure to carry through with the proceedings. The government tax collections fall and there all round chaos and uncertainty.