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Organizing your community to bring public attention to builder’s bad deeds and seeking assistance from local, state and federal elected officials has proven to be more effective and much quicker for thousands of families. You do have choices and alternatives.  Janet Ahmad

San Antonio Foreclosures reach an all time high
Wednesday, 06 September 2006

Foreclosures haunt homeowners
Nearly 850 Bexar County residents lost their homes to foreclosure Tuesday, the third-highest monthly total in more than a decade. Foreclosed homes go up for public auction the first Tuesday of each month outside the Bexar County Courthouse. The slew of foreclosures is reminiscent of the late 1980s when oil busted and the San Antonio real estate market crashed.

Foreclosures haunt homeowners 
 09/06/2006
Jennifer Hiller
Express-News Business Writer
 

 Nearly 850 Bexar County residents lost their homes to foreclosure Tuesday, the third-highest monthly total in more than a decade.

Foreclosed homes go up for public auction the first Tuesday of each month outside the Bexar County Courthouse.

The slew of foreclosures is reminiscent of the late 1980s when oil busted and the San Antonio real estate market crashed.

But today, home prices are climbing in neighborhoods across San Antonio. The city is enjoying one of the healthiest real estate markets in its history. And mortgage interest rates remain near historically low levels.

So what's happening?

"Lenders are making riskier loans," said Jim Gaines, research economist with the Texas A&M Real Estate Center. "Some of that risk is coming home to roost."

Real estate professionals say the loose lending requirements and risky loans common in the past few years have caused some families to get in over their heads.

People who buy a home with no down payment and who roll closing costs into their mortgage loan seem especially vulnerable to foreclosure.

These "upside-down" loans — so named because the loan amount is higher than the home value at the outset — make up only about 1 percent of all mortgage loans in San Antonio, according to LoanPerformance, a mortgage research firm.

But in the first half of 2006, they made up 16 percent of the Bexar County foreclosure market, according to the Addison-based Foreclosure Listing Service, Inc.

George Roddy, president of Foreclosure Listing Service, said interest rates on adjustable-rate mortgages, known as ARMs, are resetting at higher levels now, sometimes doubling monthly mortgage payments. And consumers have had a harder time getting bankruptcy protection.

"These things coupled with a tremendous increase in the cost of living have pushed many household budgets over the edge," Roddy said. "With expenses increasing, many of which have even doubled over the last year, how long can the average American family keep hanging on when income levels have not risen accordingly?"

Some homeowners no longer are able to keep pace with mortgage payments now that a whole host of consumer costs — gas prices, home insurance, property taxes and utilities — has risen. Earlier this year, credit card companies doubled minimum payments for most people.

"Families have a lot of financial woes," said Bexar County Clerk Gerry Rickhoff, whose office posts and records foreclosures. "Their expenses are going up across the board."

Divorce, death, illness and job losses mean there always will be some homes lost to foreclosure. But the number of Bexar County foreclosures has been rising since the late 1990s.

In 1996, 3,894 Bexar County homes were sold at the foreclosure auction. So far this year, 6,510 homes have sold at auction.

If this pace continues, 8,679 Bexar County homes would go into foreclosure this year, according to the Bexar County clerk's office.

Gregg Stanley, owner of Real Estate Foreclosures, a San Antonio-based foreclosure listing service, said the rise in local property values has helped many families avoid foreclosure.

"They can sell and be OK if they do it quickly enough," he said.

Without the rise in property values, Stanley said, foreclosures would be double or triple the current levels.

In the late 1980s and early 1990s, people typically lost their homes to foreclosure because of an economic downturn that led to layoffs.

"This isn't the '80s," Gaines said. "In the state of Texas we've had a lot of people buying homes in the last two or three years on easy credit terms. Lenders are pushing mortgages out the door."

It's a trend that's positive or negative, depending on whom you ask.

Homeownership is at an all-time high, Stanley said.

"That's not something that we would consider a bad thing," he said.

Gaines, too, said people who never thought they could become homeowners have been able to get into the market and, for the most part, hang onto their homes.

"Was it a good thing or a bad thing? I don't know where you draw the line," Gaines said. "These were people who were giving it a shot who were never able to give it a shot before."

The last time monthly foreclosure numbers reached these levels was in December 2004, when 857 homes went into foreclosure, and in May 2003, when 856 people lost homes to foreclosure.

Before that, 1990 was the last time so many homes went to auction in one month.

For would-be investors, the 849 foreclosures this month represent something else: opportunity.

On Tuesday, a chaotic crowd huddled under umbrellas outside the courthouse entrance, ignoring the steady rain and straining to hear the various foreclosure auctions — several of which happen simultaneously.

Lisa Allen, who was hoping to buy a house Tuesday, said she and her daughter buy one house at a time, fix it up and resell it.

Buying a foreclosure is one of the most affordable ways to do that, but it's a high-risk investment.

Allen said she always drives by the listed properties before the auction. One of the ones she peeked in on had cracked floors and a collapsed ceiling — signs of major foundation problems.

"You have to be really careful," she said.    

The slew of foreclosures is reminiscent of the late 1980s when oil busted and the San Antonio real estate market crashed.

But today, home prices are climbing in neighborhoods across San Antonio. The city is enjoying one of the healthiest real estate markets in its history. And mortgage interest rates remain near historically low levels.

So what's happening?

"Lenders are making riskier loans," said Jim Gaines, research economist with the Texas A&M Real Estate Center. "Some of that risk is coming home to roost."

Real estate professionals say the loose lending requirements and risky loans common in the past few years have caused some families to get in over their heads.

People who buy a home with no down payment and who roll closing costs into their mortgage loan seem especially vulnerable to foreclosure.

These "upside-down" loans — so named because the loan amount is higher than the home value at the outset — make up only about 1 percent of all mortgage loans in San Antonio, according to LoanPerformance, a mortgage research firm.

But in the first half of 2006, they made up 16 percent of the Bexar County foreclosure market, according to the Addison-based Foreclosure Listing Service, Inc.

George Roddy, president of Foreclosure Listing Service, said interest rates on adjustable-rate mortgages, known as ARMs, are resetting at higher levels now, sometimes doubling monthly mortgage payments. And consumers have had a harder time getting bankruptcy protection.

"These things coupled with a tremendous increase in the cost of living have pushed many household budgets over the edge," Roddy said. "With expenses increasing, many of which have even doubled over the last year, how long can the average American family keep hanging on when income levels have not risen accordingly?"

Some homeowners no longer are able to keep pace with mortgage payments now that a whole host of consumer costs — gas prices, home insurance, property taxes and utilities — has risen. Earlier this year, credit card companies doubled minimum payments for most people.

"Families have a lot of financial woes," said Bexar County Clerk Gerry Rickhoff, whose office posts and records foreclosures. "Their expenses are going up across the board."

Divorce, death, illness and job losses mean there always will be some homes lost to foreclosure. But the number of Bexar County foreclosures has been rising since the late 1990s.

In 1996, 3,894 Bexar County homes were sold at the foreclosure auction. So far this year, 6,510 homes have sold at auction.

If this pace continues, 8,679 Bexar County homes would go into foreclosure this year, according to the Bexar County clerk's office.

Gregg Stanley, owner of Real Estate Foreclosures, a San Antonio-based foreclosure listing service, said the rise in local property values has helped many families avoid foreclosure.

"They can sell and be OK if they do it quickly enough," he said.

Without the rise in property values, Stanley said, foreclosures would be double or triple the current levels.

In the late 1980s and early 1990s, people typically lost their homes to foreclosure because of an economic downturn that led to layoffs.

"This isn't the '80s," Gaines said. "In the state of Texas we've had a lot of people buying homes in the last two or three years on easy credit terms. Lenders are pushing mortgages out the door."

It's a trend that's positive or negative, depending on whom you ask.

Homeownership is at an all-time high, Stanley said.

"That's not something that we would consider a bad thing," he said.

Gaines, too, said people who never thought they could become homeowners have been able to get into the market and, for the most part, hang onto their homes.

"Was it a good thing or a bad thing? I don't know where you draw the line," Gaines said. "These were people who were giving it a shot who were never able to give it a shot before."  

Nearly 850 Bexar County residents lost their homes to foreclosure Tuesday, the third-highest monthly total in more than a decade.

Foreclosed homes go up for public auction the first Tuesday of each month outside the Bexar County Courthouse.
The last time monthly foreclosure numbers reached these levels was in December 2004, when 857 homes went into foreclosure, and in May 2003, when 856 people lost homes to foreclosure.

Before that, 1990 was the last time so many homes went to auction in one month.

For would-be investors, the 849 foreclosures this month represent something else: opportunity.

On Tuesday, a chaotic crowd huddled under umbrellas outside the courthouse entrance, ignoring the steady rain and straining to hear the various foreclosure auctions — several of which happen simultaneously.

Lisa Allen, who was hoping to buy a house Tuesday, said she and her daughter buy one house at a time, fix it up and resell it.

Buying a foreclosure is one of the most affordable ways to do that, but it's a high-risk investment.

Allen said she always drives by the listed properties before the auction. One of the ones she peeked in on had cracked floors and a collapsed ceiling — signs of major foundation problems.

"You have to be really careful," she said.
  

 http://www.mysanantonio.com/news/metro/stories/MYSA090606.01A.High
Foreclosures.35ad982.html

 
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