Foreclosure Lists Near 1989 Record: Adjustable-rate Loans and Consumer Debt Are Blamed

RISMEDIA, Jan. 22, 2007-(MCT)-Dallas-Fort Worth home foreclosure postings are still growing-fueled by higher payments on adjustable-rate loans and rising consumer debt.

The latest statistics show that pending foreclosures in Dallas County are 12% higher than a year ago and foreclosure postings are up 16 percent in Tarrant County.

The 1,940 homes in Dallas County and 1,274 Tarrant County homes threatened with foreclosure are approaching record highs, said George Roddy, president of Foreclosure Listing Service.

"This is getting serious," Roddy said. "This level is getting very close to the all-time records set in 1989, when an average of 2,000 postings were filed monthly on Dallas County residences."

Back then, it was a regional recession that caused the number of home foreclosures to spike.

This go-around it's often because of poor consumer choices, credit analysts say.

"Some of them got into more house than they can afford," said Gail Cunningham with Consumer Credit Counseling Service of Greater Dallas.

Rising interest rates on home mortgages have also caused some homeowners to default on their loans.

Many homeowners are also swamped with credit card bills, Cunningham said.

"During the Christmas holidays, everyone gets caught up in the moment and overspends," she said. "Now the bills are beginning to arrive."

While many analysts are predicting that the inflated housing market will have a "soft landing," Cunningham said she isn't as optimistic.

"In the trenches where the real folks are, they are feeling the pinch," she said.

The increases in February foreclosure postings in Dallas and Tarrant counties follow even bigger percentage jumps in January, according to Foreclosure Listing Service.

And Roddy said he's noticed some subtle changes in the types of loans facing foreclosure.

"I'm seeing a little pickup in home equity loans, but adjustable-rate loans still lead the pack," he said.

February's foreclosure postings appear to be the highest in the current housing cycle. But based on the size of today's housing market, the number of home foreclosures in the D-FW area is less alarming than it was in the late 1980s, Roddy said.

"Proportionately, we are not in the doghouse like we were in 1988 and 1989."

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