FOR thousands of Houstonians, the American dream of owning a home has become a financial nightmare.
In 2004, lenders foreclosed on 8,300 homes in Harris, Montgomery and Fort Bend counties — more than double the number five years before.
And in the first seven months of this year, Harris County foreclosures jumped 16 percent over the same period a year ago, according to the Foreclosure Information & Listing Service.
Divorces, layoffs and serious health problems have always been blamed for foreclosures. But homeowners, real estate agents and market observers are now pointing to new reasons: overextended borrowers, aggressive lending practices, stagnant home prices and fast-rising property tax bills.
"More and more people are having problems with their jobs, a lot of people bought houses without a lot of money down, taxes are escalating, and they haven't gotten that kind of a raise," said Frank Lucco, a real estate consultant with Frank J. Lucco & Associates. "We're seeing foreclosures of houses only 2, 3 or 4 years old."
More homeowners are also getting right to the brink of foreclosure. The number of homes posted for foreclosure — a warning that the bank can foreclose in 21 days — totaled 19,866 in Harris County last year, the highest since 1989. That number includes a small percentage of commercial properties.
When owners get this warning, they must act quickly to avoid losing their homes. Their alternatives are to reach a deal with the bank on the past-due payments or sell their houses in a hurry to repay the debt.
In the country's hotter housing markets, homeowners facing default can put their homes up for sale and quickly walk away with a check for more than what they owe on the property. That's often not an option in Houston, where home-price appreciation averaged less than 1 percent last year and fell in some neighborhoods.
"A rapidly appreciating market hides a lot of sins," said Ray Allison of AllisonSpear.com Realtors. "In a slower-appreciating market where people are buried in debt, those sins float to the top."
Rest of article at http://www.chron.com/cs/CDA/ssistory.mpl/front/3327329
- Deborah