Foreclosure Situation In Texas Under Control

June 10th, 2008

Today Texas ranks 17^th in the nation on foreclosure rates. Compared to states like California, Florida and Ohio the rate of increase in foreclosures in this state is not disturbing. In fact experts consider it to be quite stable. Here for every 809 households, one may face foreclosure. Nationally, however, one in every 519 households faces foreclosure.

This does not mean that foreclosures are not happening in Texas. According to the Greater Texoma Association of Realtors the number of home sales due to foreclosures has been rising every year since 2000 with the exception of the period between 2004 and 2005. However, Ron Schildknecht, Association Executive of the Association feels that residents of Texas do not have much cause for worry yet and vouches for the stability of the housing market in the state.

Vanya Griffith, Sherman Branch Manager of WR Starkey Mortgage looks on the brighter side and feels that the foreclosures could actually be “putting a spark in the market.” She believes that the current situation is attracting investors who are interested in buying and remodelling homes. As a result additional rental properties are being created and mortgage loans are on the rise.

Griffith nevertheless points out that eventually foreclosures may have a negative effect on the market as homes are selling below their market price now. Thus, Griffith feels, the foreclosures may stalemate the value of the homes and in future they may not increase much.

Measures are being taken to ensure that foreclosures do not become a major problem in the state. The Homeowners Preservation Foundation is a non-profit organization that telecounsels homeowners who are facing problems with foreclosures. It helps owners deal with the difficulties appropriately and avert a crisis.

Quite often the solution lies in working out a plan with the lenders. Griffith points out that lenders are as anxious to avoid the foreclosure process as homeowners as they also lose money in this process. Thus most lenders are open to working out a solution that will help the owner retain the home.

Another initiative has been The Federal Housing Finance Regulatory Reform Act of 2008. This bill is waiting to be considered by the Senate, after having been passed by the House. The bill aims to bring relief to home owners by protecting them without giving lenders, investors or borrowers any particular advantage.

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Republican Ralph Hall (R-Texas) says “It’s better than nothing, but it’s kind of like fixing the gate when the horse is already gone.” He strongly believes that financing relief programs should be the responsibility of every state.