why is Texas #1 in the country for foreclosures?

Foreclosures, Short Sales, Tax Foreclosures
1

Just wondering why is Texas #1 in the country for foreclosures? Also I heard word the property taxes will be lowered. Any word on this change?

2

First, I’m not sure exactly why Texas leads the nation in foreclosures. It’s probably a multitude of things, and not one thing in particular. We do have some of the highest property tax rates and insurance rates in the country, so that may be one of a plethrua of reasons.

Speaking of property taxes, the governor is pushing for property tax relief in this whole school financing headache that has reached the national news. But don’t think the rates will suddenly be cutting people’s property taxes in half or anything close to that. I heard his plan would cut only $500/yr from a home worth $250k (or was it $300k?) - big deal. With property tax rates anywhere from 2.25% to almost 3% in some areas, that’s like a drop in a bucket (e.g., 3% on a $300k house is $9k, and $500 represents less than a 6% decrease). The governor has already called two special sessions on top of the regular session with nothing being resolved yet, so stayed tune.

3

Q: Why is Texas #1 in the country for foreclosures?

A: A larger percentage of people in Texas do not pay their monthly mortgage payments.

:wink: Sorry…I couldn’t resist!

4

Texas is at the bottom of their cycle. Not that it fluctuates much but foreclosures are peaking right now.

5

  1. Tech layoffs hit us really big still back in 2003. The market took a dive, so it moved to a buyer’s market. Sellers who had overpaid started defaulting since prices were so low. Some of the ones who were still struggling are now losing the house or just walking away from it.

  2. At that same time, with the combination of builder incentives, low rates, and zero down loans, a LOT of people who may not have normally qualified were buying houses. Many those first time buyers who purchased around 2004 are still defaulting. Some weren’t told that their new homes were only taxed on the land and the taxes will increase after the new construction is completed.

  3. A lot of lenders started hammering the home equity market because rates were so great. People who had been in the their houses for 10-20+ years got home equity loans and now cannot keep up with the payments.

Combined with increasing property taxes and insurance rates, it’s a foreclosure heaven/heck here.