Silver linings few in housing market

Foreclosure rates are up in Brownsville and Harlingen – slightly higher than the state average but lower than the national average.

According to First American CoreLogic, a Santa Ana, Calif., firm that collects real estate data from around the country, the rate of foreclosures among outstanding mortgages in Brownsville-Harlingen was 1.2 percent in July 2009 compared to 1 percent for July 2008.

The state’s foreclosure rate was 1 percent in July 2009 and .7 percent in July 2008. The nation’s foreclosure rate rose from 1.6 percent to 2.8 percent between July 2008 and 2009.

The mortgage delinquency rate also increased for Brownsville-Harlingen: According to First American, 4.7 percent of mortgage loans were 90 days or more delinquent in July 2009 compared to 3.7 percent for the same period last year.

The rise in 90-day deliquency rates for mortgages averaged higher on the state and national levels: 2.9 percent to 4.3 percent between July 2008 and 2009 for Texas, and 4 percent to 6.8 percent for the United States. First American bases its foreclosure data on the actual number of mortgage loans, rather than the total number households in a given area, in order to provide more accurate results by not counting mortgages that have been fully paid off.

The U.S. foreclosure rate hit a record high in July with August poised for a repeat, according to the data-tracking firm RealtyTrac, which predicted a continued rise in foreclosures for another year – kicking housing market recovery further down the road.

The number of real estate-owned properties – the industry term for foreclosure properties that have been repossessed by banks or lenders – fell locally, state and nationally. REOs fell from .6 percent to .3 percent in Brownsville and Harlingen from July 2008 to July 2009; from .4 percent to .3 percent statewide and from .8 percent to .5 percent nationally.

On its face this sounds like good news, since falling REOs means bank reposessions are down. However, the pipeline is clogged with foreclosures for the foreseeable future. A spokesman for First American compared it to the flood after the rain.

If there is a silver lining to a high foreclosure, it’s the increase in the number of great deals on the housing market. But don’t get too excited. As Realtor Nancy Harden points out, it can be tough for regular folks to get their hands on foreclosed homes when investors with lots of cash to spend are usually going after the same houses.

"The good deals go immediately – just within the first couple of days usually," she says. "The little guy has has a hard time getting those because they don’t have the cash. They have to get a loan. There’s not that many (properties) that are in good condition and low priced, and lots of lenders won’t lend unless it’s in very good condition."

Some of those deep-pocketed investors are Mexican nationals who, anticipating a major currency devaluation in their own country, are putting their money into on the U.S. side of the border, Harden says. Despite the odds, many of Harden’s clients are determined to scoop up a foreclosed home. She admits it keeps her busy.

"The people want to try," she says. "I have to do what they want. I’m going around in circles a lot of the time."