Foreclosed Houses for Sale Keep Rising in Central Texas

The number of foreclosed houses for sale continue to increase in Central Texas, although an increasingly large percentage of the increase are repeat listings by mortgage lenders that have not completed the repossession of foreclosed houses for sale.

According to Bonnie Brown, a top executive at foreclosure tracking firm Foreclosure Listing Service Inc., 57 percent of total postings for the auction on June 2 were repeat postings.

The 57 percent was an increase from the 49 percent level in April and the 37 percent level in March. Brown said the pattern is the same in the other Central Texas counties.

Mortgage lenders have been filing foreclosure actions after borrowers default on their monthly payments, but they do not immediately repossess the properties and list them as foreclosed houses for sale. Many of them try to restructure mortgage terms under the Obama administration’s Making Home Affordable program for homeowners determined to save their homes from becoming foreclosed houses for sale.

Housing analysts and realtors contend that banks and other mortgage lenders are increasingly becoming hesitant in repossessing houses that they are unable to sell in a battered real estate market.

Holding off on foreclosures also enables lenders to avoid paying insurance and maintenance costs. What they do is just repost the delinquent houses to protect their capability to repossess the houses at a later time.

All in all, postings for June in the counties of Williamson, Travis, Hays and Bastrop increased by 52 percent compared to postings for June 2008. They increased by the same pace during the first six months of the year.

Meanwhile, the state of Texas was 29th in foreclosure rate in RealtyTrac’s charts for the first quarter of 2009, with one house in every 373 housing units hit with a foreclosure filing. It had a total of 25,259 filings, including 34 notices of defaults, 14,564 notices of trustee sale and 10,661 real estate owned properties.

In RealtyTrac’s April foreclosure report, Texas was 27th in foreclosure rate, with one in every 834 housing units hit with a filing. Although Texas was not among the top ten states with the biggest foreclosure rates in April, it was among the top ten states with the biggest number of properties hit with foreclosure filings.

In related developments, foreclosed houses for auction in Central and North Texas sold for 64 percent of original prices during the May auctions, according to Foreclosure Listing Service. Nearly 175 foreclosed houses for auction were bought by third party home buyers.

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