Archive for the 'Texas' Category

Dallas foreclosed properties in the commercial sector are soaring, based on data from a foreclosure listing service in Collin County, Texas.

Over 2,000 commercial buildings have been listed for the Collin County foreclosure auction on November 3, an increase of 10 percent compared to postings for the November auction last year.

The most recent commercial foreclosure was the four-level Times Square retail and apartment complex along Collin McKinnery Parkway. Among the nearly 250 commercial buildings in the Dallas area included in the Collin County foreclosure auction, the Times Square property was the most expensive.

The development firm failed to pay its loan of $44.48 million, which it borrowed in 2006 to complete the project. The lender, Bank of America Corporation, will sell the building at the November foreclosure auction, based on legal filings.

Another recent commercial foreclosure was a 24-year-old office building along Lakeside Boulevard at the Telecom Corridor technology business center in Richardson. The owner of the Telecom building failed to pay his loan taken out in 2007 that has grown to $24.75 million.

A warehouse in Mesquite whose owner failed to pay his outstanding loan of $25.7 million has also entered foreclosure. The warehouse was foreclosed by Compass Bank.

According to the listing service, the total value of all Fort Worth and Dallas foreclosed properties in the commercial sector that would be sold off in the November foreclosure auction has surpassed $482 million.

Nearly 2,000 commercial buildings in the counties of Dallas, Tarrant, Collin and Denton have been foreclosed, according to the listing service, over 10 percent higher than last year.

Housing analysts said that if commercial foreclosures continue at current pace, the commercial sector will face a serious problem.

Based on a report from Moody’s Investors Service, the values of commercial real estate nationwide have fallen by over 40 percent from their levels in 2007.

Because of the collapse of many business enterprises, vacancy rates in the commercial sector have soared despite substantial discounts in rental rates.

According to the National Association of Realtors and Torto Wheaton Research, vacancy rates in the retail sector in August ranged from six to 20 percent in 47 major metro areas while vacancy rates in the industrial sector ranged from 8 percent to 21 percent. The nationwide industrial vacancy rate was 13.6 percent while the nationwide retail vacancy rate was 12.1 percent.

In the second quarter of this year, more Texans have fallen behind on their mortgage payments. This created fear among industry experts who said that the increasing rate of delinquent loans could boost the number of foreclosure homes in Houston.

Another great concern for industry experts is the failure of lenders to modify loans of distressed homeowners. Some troubled homeowners said that they have tried to get their lenders to modify their loans but they only succeeded in getting their lenders agree for moratorium on their bills.

According to industry experts, banks have the option to modify the loans of financially strapped borrowers. This means reducing interest rates or the outstanding loan balance. However, with the growing foreclosure rates not just in Texas but nationwide, lenders were pressured to modify an unprecedented number of loans.

The deluge of borrowers wanting to have their loans modified resulted in a backlog of cases and delays which cost many homeowners their properties.

Under the federal government’s loan modification program, homeowners whose mortgage payments exceeded 31 percent of their total monthly income can apply for a loan modification to reduce their payments.

In Houston, the loan modification program failed to provide relief to a growing number of distressed homeowners. In June, 1.1 percent of troubled mortgages were repossessed, a significant increase from the 0.8 percent reported in the same month last year.

On a year-to-year basis, the number of foreclosure filings reached 51,866 in Houston area, representing 142.1 filings daily. Comparable rate of foreclosure filings posted between July 2007 and June 2008 totaled 48,234 or about 132.15 daily.

Meanwhile, the mortgage delinquency rate rose in June with 4.9 percent of the total loans 3 months or more delayed compared with 3.4 percent reported in the same month a year earlier.

Statewide, the number of homeowners who missed their mortgage payments rose from April to June. Data showed that one in every 10 homeowners are either late in their payments or are in foreclosure.

As of June, delinquent residential mortgages in Texas accounted for 8.79 percent of the total home loans. In additional, 1.84 percent of mortgage loans went into foreclosure.

The delinquency rates in Houston and Texas are similar to the nationwide trend of increasing loan defaults in the second quarter. Of the total home mortgages in the country, 9.24 percent were delinquent during the period.

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The pace of foreclosures in Central Texas continued to increase despite federal and state government efforts to help distressed homeowners, according to a Texas-based real estate research firm.

The number of properties to be sold off in the September 1 foreclosed homes auction increased by 40 percent to 1,071 units, compared to foreclosures filed for the September auction in 2008. For the September 2008 auction, a total of 765 properties were filed.

For the first 3 quarters of this year, a total of 10,098 foreclosure cases were filed in the Central Texas counties of Williamson, Travis, Bastrop and Hays, an increase of 56 percent from the 9,008 total filings in the first 3 quarters of 2008.

According to analysts, the 56-percent rise was the largest rate increase in year-to-date filings among major metro areas in Texas. In Bexar County, foreclosure filings increased by 40 percent, compared to filings in the first 3 quarters of 2008, and in the Fort Worth-Dallas metro area, foreclosure filings rose by 20 percent.

Meanwhile, in the past 5 years, the Austin metro area has the smallest rate of increase in year-to-date foreclosure filings among the 3 metro areas in Central Texas. Nonetheless, foreclosure filings in Austin exceeded 1,000 every month for the past 8 consecutive months.

Peter Sajovich, a Texas broker who purchases foreclosed homes for investors, said that foreclosures in the region will continue at an above average pace until the economy recovers. He added that foreclosures on investor-owned properties will continue for the next couple of years.

Mark Sprague, a consultant for Residential Strategies Inc., said that the nationwide home price level has not yet hit bottom and is affecting local markets such as Austin.

On the other hand, David Reed of Integrity Homes Mortgage, said he is expecting that foreclosures in Central Texas will slow down in the coming months because layoffs in Texas are not as massive as in other states. He added that the economy of Texas is among the best in the nation.

Reed explained that the high number of foreclosed properties in Texas has not been able to push down home values sharply because the foreclosure percentage compared to the entire housing market is low.

This is the reason why, according to Reed, banks are still able to sell their foreclosure properties at prices close to the price levels of non-foreclosure properties.

The number of foreclosed houses for sale continue to increase in Central Texas, although an increasingly large percentage of the increase are repeat listings by mortgage lenders that have not completed the repossession of foreclosed houses for sale.