208,078 New Listings - November 2009 - Last update November 20, 2009 12:30 PM EST 
Foreclosure auctions now popular in Texas
According to a study done by the Texas Department of Housing and Community Affairs, between July 2005 to June 2006,Texas was the state with the most foreclosures nationwide, topping over 35,000 during the period. The study also found that, for every 1050 mortgages in Texas, there was at least one foreclosure every month. The highest number of foreclosures in the state, occurs in the city of
Dallas.
Many realtors feel that the main reason why there is an increase in foreclosures, is the adjustable rate mortgages that many people took out. With these mortgages, the rates can increase and the monthly payments along with it. So if a client started out with an interest rate of say 7%, which increased to 15% after a couple of years, they will see their payments increase from about $600 to over $1800 a month. Realtors also feel that the financial institutions should have been much more responsible when making loans.
Yet not every foreclosure happens because of bad loan decisions, some people have had unusual circumstances happen to them that caused them to be unable to keep up their payments. These include medical problems, injury, and divorce.
Despite of the reasons why there are so many foreclosures, houses are being auctioned off and there are quite a few willing buyers. Many of these auctions in Texas are very competitive, with a lot of the buyers looking to make a profit.
In the town of El Paso, the county holds an auction for foreclosed properties, every first Tuesday of each month. Bidders purchase a monthly list of foreclosed properties, to see what is going on sale. The properties listed have starting prices ranging from $2000 up to $450,000, and can be a small lot to a massive mansion.
Many buyers after they have purchased a property at the auction, report that they are likely to face some problems, because the family is still living in the home. Often times they have to call the sheriff to assist them in getting the family out. Buyers have also reported, that sometimes the family had paid money over to someone, who told them they could stop the foreclosure.
Housing counselors advised people to be weary of letters they receive, offering to prevent or stop the foreclosure immediately, and requiring them to sign any document and also make some sort of payment. It is possible that the home owner may find themselves renters in their own home, because they have signed over the title to their property.
Another advice housing counselors give, is that when people find themselves in trouble, and are unable to make their payments, they should without delay see a housing counselor, or contact their mortgage company. One of the more important piece of information people do not know, is that Texas law gives the borrower twenty days after receipt of notification from the lender, to make arrangements. If arrangements are not make before the twenty day period expires, then the lender has the right to begin foreclosure proceedings.
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A lot of blame is being put on the adjustable rate mortgages, but you’re right: there are a lot of other factors that cause foreclosures, as well. Medical problems, the sudden loss of a job, and poor financial planning seem to be a lot more common than an unexpected rate reset, although a financial hardship coupled with an increase in the rate almost guarantees the house will go into foreclosure. Hopefully, as more foreclosure victims become aware of their rights under the state laws and how housing counselors can help them, more homes will be saved from foreclosure.