Mclennan County and Foreclosures

January 24th, 2008

In February a record number of houses (115) sitting on foreclosures in Mclennan County will face auction, according to records complied by Harvey Public Records. It is a record as far as monthly figures go, as the only time figures came near to this was in November 2007 when there were more than 100 foreclosure postings after 113 notices had been filed. The previous year saw 122 more foreclosure filings than 2006.

The local foreclosure trend is in tune with the national crisis. Most experts lay the blame at the door of the sub-prime crisis wherein initial teaser rates go up to astronomically after a honeymoon period of about two years. The borrowers then just cannot manage finances. Hunting around for reasons some are of the opinion that rising daily expenses and medical expenses are to blame – more so than increasing interests.

Of the 59 people who asked for foreclosure counseling in 2007 only 3% blamed the sub-prime rates. Most – that is about 58% - said that their own financial position was at fault. There were unemployment problems, chronic diseases to tackle and other personal problems like divorce and death. The sub-prime crisis is just adding fuel to the fire that is already burning.

Non-profit organizations are coming forward by holding workshops to help those about to lose their houses. Avenues of escape will be discussed. The bottom line is that without delay the borrowers should seek help. Delay will spell disaster, commented Roy Nash the director of NeighborWorks. If one knocks for help even before the missing of an instalment there is hope but once the instalment dues pile up it becomes difficult if not impossible. The Congress has set aside $167 million for counseling in 2006. If these workshops are well attended then NeighborWorks can apply for more grants.

NeighborWorks help the house owners to budget their income with expenses and locate those that can be cut and diverted towards mortgage repayment. After assessing the financial position the counselor now focus on the seven options available for avoiding foreclosure. Amongst these are repayment plans and or coming to an understanding with the lender regarding modification.

Unfortunately borrowers do not want to recognize the problem at the initial stage and bury their heads in the sand hoping that the cloud would pass. They must realize it is a problem and take the bull by the horns if they want positive action.