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Foreclosures hit historic low in North Texas. Are they heading back up?

Gordon Dickson, Fort Worth Star-Telegram on

Published in Home and Consumer News

The Dallas-Fort Worth-Arlington market didn't suffer nearly as much during the housing crisis as Las Vegas and many communities in California and Florida. Also, in cities such as New York and Philadelphia foreclosure rates remain high.

But even so, Blomquist is concerned about some small indicators he is seeing in North Texas since this past summer.

Foreclosures remain historically low, but Attom Data's monthly data figures show the number of foreclosures has been higher than the same month a year earlier in five of the past six months.

It could be a sign that lenders are going back to their old ways and approving risky loans, he said.

The Trump administration has proposed rolling back some of the restrictions on the mortgage industry enacted as part of the 2010 Dodd-Frank Act (some of the changes have met with resistance in Congress).

"In five of the last six months, we've seen a year-over-year increase (in auctions and bank repossessions) and that kind of pattern does indicate to me that there is some loosening of the lending standard," he said. "In the peak of the Great Recession, in 2009 and 2010 there was some regulation tightening, but it is gradually starting to loosen and we're starting to see the result of that."

At the very least, Blomquist says the rate of foreclosures in North Texas has gotten about as low as it is probably going to get.

Banks hold on

Also, in North Texas there could be less foreclosure activity on the courthouse steps because banks are holding onto repossessed properties and waiting until they find a seller willing to pay a higher price.

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Home values have skyrocketed 33 percent in the Dallas-Fort Worth area just since 2014, and the median home value in Tarrant County is now $249,000. That's compared to $188,300 three years ago and $150,900 in 2007 during the housing bust.

With values steadily rising, banks may be content to hang on to the vacant properties and simply pay the property taxes until they find a buyer willing to pay top price, said J.R. Martinez, president of the Greater Fort Worth Association of Realtors.

As an example, Martinez said one of his relatives lives in Haltom City across the street from a home that was acquired by a bank through a reverse mortgage. It has remained vacant for two years.

"The lady died, and the house hasn't been occupied for two years now," he said. "The bank foreclosed on it, but still hasn't put it on the market. Banks don't just give the houses away. Even at auctions, just because a house is available at auction and someone makes a bid and gets it, that doesn't mean the bank will accept it."

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