Foreclosures in Texas will flow Across the State

Posted on February 25, 2009
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The Senate has been warned that repo homes in Texas will flow across the state causing a snow balling effect. A minimum of one in every residential house owner will feel the adverse effects of the large number of foreclosures hitting the state.

Housing pundits said that in 2008 there were nearly 96,000 repo homes in Texas. This year the same number is apprehended. It will not only directly tell upon those who are losing their homes but also the adjacent neighbours and the community at large because of the drop in property value. One survey showed that that value of taxable property would go down by over $5 billion.

David Long of Texas State Affordable Housing Corporation said, “The foreclosure crisis will affect everyone whether you are directly impacted or not.” Long observed that compared to other states Texas had fared much better till now despite the surge in sub-prime mortgages. It is the massive meltdown of these loans that are responsible for the mortgage crisis on a national scale.

From 2005 to 2006 over a third of all the home loans belonged to the sub-prime category. Texas followed close on the heels of Mississippi in sub-prime mortgage figures. Long was not sure about the exact figures but informed the Senate Intergovernmental Relations Committee that by the close of 2010 the foreclosure rate would read 1:35 in Texas.

Senator Royce West (Democrat-Dallas) asked David Long as well as the executive director of Texas Department of Housing and Community Affairs to work speedily on a state measure that aimed to use the federal grants coming in, to stabilize the market in Texas. West said, “I don’t want to sit back and wait for the federal government to move. I want us to move aggressively on this right now.”

Senator Dan Patrick (Republican-Houston) said he was worried that many house owners will not see a corresponding drop in their taxes on their property despite the fall of property rates in the market. He said that he would ask appraisers of the jumbo metro areas to speak on the impact of foreclosures on the valuation of properties.

During the current session the lawmakers will be considering several measures connected with foreclosures. A bill has been filed by Senator Craig Estes (Republican-Wichita Falls) that would extend the period of grace for foreclosure victims from 20 days to 45 days. It also give 30 days to the occupant to vacate the unit.

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