Dallas and Fort Worth Foreclosures Exceeded 61,000 This Year

by Donald Hanz on cities

Dallas and Fort Worth foreclosures surpassed 61,000 residential units this year, according to data from the Mortgage Bankers Association.

Total foreclosures marked an increase of 23 percent from total foreclosure filings last year and an increase in the percentage of fixed-rate mortgage loans going into default.

According to the MBA, almost one-third of foreclosure filings in the July-September quarter involved mortgage loans taken out by borrowers who had strong credit records and who used fixed-rate loans. The percentage was a sharp increase from 21 percent last year when subprime loans accounted for most foreclosures.

The delinquency rate in the Dallas-Fort Worth area and in the entire state also increased in the third quarter. About 9.6 percent of all mortgage loans in the metro area were either in default or in foreclosure during the quarter, marking the ninth consecutive quarter that the delinquency rate hit record levels.

Across Texas, the mortgage default rate was 9.8 percent and almost two percent of these delinquent mortgage loans were already in the foreclosure process. The foreclosure percentage however was lower than the nationwide rate of 4.5 percent. The nationwide default rate was 9.9 percent.

The MBA said that Fort Worth foreclosures during the quarter were caused largely by unemployment. The Dallas-Fort Worth jobless rate in September increased to 8.3 percent and remained at this level in October.

According to Scott Norman, vice president of the Texas Mortgage Bankers Association, despite the adverse impact of unemployment, he expects the rate of defaults to decrease in the coming months. He reiterated that Texas continues to be among states with the least percentage of mortgage loans in foreclosure.

Based on MBA data, the U.S. states with the biggest default rates in the July-September quarter were Mississippi, which posted 14.4 percent, and Nevada, which registered 14 percent. Third was Georgia, which posted nearly 13 percent.

Based on foreclosure rates, Florida topped other states with its 13-percent rate. Nevada was next in line with its 9.4-percent rate.

Analysts said that despite the improvement of home prices in many areas of the country, including the Dallas-Fort Worth area, price levels are expected to fall again when banks release their foreclosure inventories and when they pursue foreclosures on mortgages that were modified under federal and state foreclosure prevention programs but which redefaulted.