Archive for Sunday, October 19, 2008

Second wave of mortgage troubles strike

October 19, 2008


When mortgage foreclosures began a steady increase a couple of years ago, the culprit was considered to be adjustable rate loans.

Now, at least in northeastern Kansas, there is a second wave of people facing foreclosure, according to a counselor with Housing and Credit Counseling Inc. Those facing foreclosure are the people who can't make their mortgage payments because of increased expenses - such as for energy and food.

"You have some folks trying to decide whether to keep their mortgage current or their credit card payment current so that if they need their card to pay for gas and groceries, they've got that open line of credit," said Robert Baker, counselor for the Lawrence area.

Whatever the reason, the rate of foreclosures among outstanding mortgage loans in Lawrence was 0.40 percent in August, according to First American CoreLogic, of Sacramento, Calif., which collects data on national, state and local foreclosures and related information. That number is up from 0.20 percent for the same month in 2007.

The number of outstanding foreclosures in Lawrence, including new and existing filings through August of this year, was 36, CoreLogic reports. Yet foreclosure activity in Lawrence was lower than the national foreclosure rate, which was 4.4 percent for August.

The mortgage delinquency rate in Lawrence also increased. CoreLogic found that 1.3 percent of mortgage loans were 90 days or more delinquent in August compared to 0.9 percent for August 2007.

At the same time, house prices in August increased 1.1 percent from a year earlier. The median price for a home in Lawrence is $170,000. Nationally, home prices fell 7.83 percent, according to CoreLogic. The national median price for a house is $203,900.

Lawrence also saw single-family home sales decrease by 30.71 percent in August from August 2007. Nationally, sales were down 34 percent.

In recent months, mortgage problems have beset people who owe more on their house than they can sell it for, Baker said. In those cases, selling a house to get out of default might not be a good option, he said.

"Buyers have a lot more choices. There are probably a lot fewer buyers now," Baker said. "They can afford to be choosy."


Chris Ogle 9 years, 7 months ago

Pogo- I agree with most of what you said. However, I did start at the bottom, and worked into the middle... over a period of 35 years. Now I can't sell my house, can't afford the taxes on it, and on a fixed income, don't know what to do. The problem is not getting any smaller.

yankeevet 9 years, 7 months ago

Why doesn't the property tax go down; when the value of houses go down? What say you?

unite2revolt 9 years, 7 months ago

Its because of the mil levy system. If everyone's house value goes down, like it has recently, the government simply increases the mil levy so you pay the same or more in taxes. Essentially the value of your house doesn't really matter, except when comparing to another tax payer. For example here is how it worked this year in Douglas County. The government realized we were going to have a tax revenue shortage, they determined the amount that the mil levy would have to be increased to meet the proposed budget. The elected officials said its too much of an increase for the individual taxpayer, and asked for proposals to cut the budget. The bureaucrats then said if we cut outside funding we could only increase taxes by this much instead. Outside funding means all the programs, that are staffed by non-bureaucrats. The elected officials think this sounds like a good idea but are nervous about cutting these programs so they have several days of hearings and settled on an amount to cut from or give to each program that only raised the mil levy by an acceptable amount. Or so they thought.In a few weeks the city will be asking us to decide if we want to increase our sales tax, a tax that is paid by everyone who shops in Lawrence, not just those who own houses here, think about it.

Chris Ogle 9 years, 7 months ago

Think of the snowball effect.... housing prices drop, taxpayers protest the "appraised" value, and the county ( going broke) has to raise the mill. How many times will this cycle repeat before we go down with the ship?

David Albertson 9 years, 7 months ago

To the original poster, I agree that our taxes are too high. If you feel that strongly about it, run for county commision. I'm sure you could pick up many votes on the tax thing alone.

budwhysir 9 years, 7 months ago

Let us tax our way from this problem. All economic models are designed and duplicated from the value of home prices. If the banks end up with all the realestate and all the bailout money, house prices will crash and values will be nothing. I am not sure at this point foreclosure may be a blessing for many as in time your $250,000 home may be worth $80,000. What is your mortgage balance

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