Last year, 1,381 homes were sold by auction on the Bell County Courthouse Annex front steps, compared to 1,334 for 2006.
However, comparing Bell County to Central Texas neighbors to the north and south provides a mixed bag of information.
Here in Bell County, 2007 foreclosures are up 4 percent from 2006 and they rose 11 percent since 2005. Not very good, especially when compared to the Austin metropolitan area’s decline of 8 and 13 percent for the same time period. Yet Bell fared much better than adjacent McLennan County, which from 2006 to 2007 increased 14 percent, and from 2005 to 2007 increased 12 percent.
Thirty-nine percent of Bell foreclosures were VA loans, the largest single category. VA loans are insured or guaranteed by the U.S. Department of Veterans Affairs, typically made to veterans for housing.
Dr. Mark Dotzour, chief economist at The Real Estate Center at Texas A & M University, said the recent surge in foreclosures may be attributable to inflation.
“Some of it is just coming from everything getting so expensive - $3 a gallon gas, $4 dollar a gallon milk, property taxes, electricity rates going up,” said Dotzour.
Moderate home prices and low interest rates continue to make Texas real estate a good value, Dotzour said. Although he expects foreclosures to continue through 2008, Dotzour said Bell County is insulated from the extreme rise in foreclosures experienced on the East and West Coast.
“What’s happening in San Diego, doesn’t matter to Temple. Every real estate market is different,” said Dotzour. “Real estate is ultimately a localized product.”
George Roddy Sr, president of Foreclosure Listing Service Inc., a company that tracks North and Central Texas foreclosures, said 16 percent of Bell County homeowners who faced foreclosure simply got in over their heads, ending up with what’s called an upside down situation.
“This means the loan amount is higher than the assessed value of the property (based on appraisal district values) thus creating a no-win situation for the homeowner and the lender,” Roddy said.
Caren Hildinger, Temple branch manager for Castle & Cook Mortgage LLC., said that some of the foreclosures could be attributed to several factors: Approving buyers with low credit scores, little or no down payment, no rainy day reserves and buying too much house compared to income.
“Industry guidelines have allowed that to happen. We’ve seen more relaxed credit standards in recent years. We need to get back to common sense,” Hildinger said.
Hildinger said the mortgage business is in the midst of a necessary correction.
“What this is making our industry do is get back to the basics of prudent underwriting.”
