Texas leads in December 2006 Foreclosure Rates
January 21st, 2007 by 
Joseph Smith
Foreclosures filed in Texas last December 2006 reached an amazing 14, 195 or 1 for every 567 homes. This number includes loans that are considered delinquent and/or in stages of foreclosure like notice to cure, default notice and posting, foreclosure for sale and finally the active foreclosure inventory.
In 2000-2001, Texas has a foreclosure rate that was below the nation’s average. But by 2003, foreclosure rate in Texas significantly increased due primarily to aggressive mortgage lending practices and slow home value appreciation. Homeowners who were not considered to be suitable loan candidates were preyed upon by lenders offering adjustable rate mortgage loans that feature “no down” or “interest only” options. Since they can not really afford the property in the first place and the costs incurred in owning a home (taxes, insurance, etc.), it is not surprising that these buyers default in their payments. Their supposed equity on the property is useless in a market climate that is considered to be quite sluggish.
These lenders may gain instantly from relaxing their underwriting criteria but in the long term, they might find their selves with a great inventory of foreclosures. A high Texas bank foreclosure rate may even drive down property value in the area. This is the main reason that many lenders decide to offer their REOs in public auctions or foreclosure listings. Aside from the possibility of selling these REOs quickly, lenders can attract a bigger number of investors or potential buyers. Real estate brokers like Foreclosure Deals offer these REOs in their foreclosure listings up to almost half their average market prices.
Texas bank foreclosures offer a wealth of potentials for real estate investors. Aside from having many homes to choose from, real estate investors can purchase them at great discounts.
