Sunday, July 13, 2008

Deschutes County Foreclosures Double

From the Bend Bulletin:

When the Deschutes County Clerk’s Office closed June 30, an ominous milestone was reached. Through the first half of the year, 788 notices of default — a document initiating foreclosure proceedings —were filed with the county.
The number is significant, considering 590 of them were filed in all of 2007, and just 221 in 2006.
The amount is still a small percentage of all loans outstanding. But the numbers behind the notices of default tell a lot about the rise and fall of the housing bubble.
Of those notices of default filed in 2008, more than 75 percent are for mortgages originated in 2006 and 2007, coinciding with the local real estate boom, according to an analysis by The Bulletin.
That doesn’t surprise Tim Duy, an economist with the University of Oregon. Duy said delinquent borrowers caught up in the frenzy either bought too much house or were stuck with unrealistic loan terms that became inescapable as the market declined.
“A lot of people expected they would be able to make quick sales, or a lot of people bought at high rates and with zero down, on the expectation they would build equity and (refinance at a later date) to get a lower mortgage rate,” Duy said.
Also, borrowers who took out loans in 2006-07 with an initial fixed rate that later switches to an adjustable rate are caught in a similar predicament, he said. Unable to refinance and get a lower interest rate, and with fuel and food prices driving higher, “something has to give.”

RealtyTrac, an Irvine, Calif.-based online marketer of foreclosed properties, reported Thursday that 1.4 million foreclosure filings of all types, including notices of default, were filed in the United States in the first six months of 2008. That represents a 56 percent increase from a year ago, the report said.
Oregon ranked 17th in the nation for most foreclosure activity as of June 2008, according to RealtyTrac. That equates to one foreclosure proceeding for every 775 housing units. In Nevada, the state with the most foreclosure activity, one in every 122 housing units is affected, according to RealtyTrac. The national number is one in every
483 homes.
Deschutes County ranked first in the state for foreclosure activity as of June 2008, with one foreclosure proceeding for every 414 homes, according to RealtyTrac.