Inner Loop Foreclosures

[travelguy_73]

http://blogs.chron.c..._neighborh.html

http://www.scribd.co...on-Foreclosures

What is interesting is the number of foreclosures in the Third Ward/Riverside Terrace area (south central inner loop) and the area along the western part of the North Loop (lots of townhomes there).

[kylejack]

Wow, the Third Ward got destroyed.

I wonder why Third Ward looks so wiped out compared to Fifth Ward. Perhaps Fifth Ward is older, more established neighborhoods?

[AtticaFlinch]

I'm curious how many of these were tax vs mortgage default foreclosures.

[rbarz]

I'm curious how many of these were tax vs mortgage default foreclosures.

Lots and Lots of mortgage default scams with straw buyers...

[travelguy_73]

Wow, the Third Ward got destroyed.

I wonder why Third Ward looks so wiped out compared to Fifth Ward. Perhaps Fifth Ward is older, more established neighborhoods?

This is pure speculation on my part, but I think the foreclosures were fueled by relatively recent purchases, 2005-2007. The Fifth Ward probably has relatively little turnover, and not a lot of home ownership, but long-time renters and equally long-time landlords. The Third Ward was starting down the gentrification path with townhomes, flipping, and creative financing, whereas no one was looking at the Fifth Ward as a place to live or make any money. So there was a different kind of buyer.

Eastwood has been relatively unscathed as well.

I would have expected to see more in the Midtown and Montrose area as people stretched thin to buy, but that doesn't appear to be the case.

[sarahiki]

My evidence is limited to what I saw happen in one townhome community in the third ward, but perhaps it is indicative of a wider trend. There, we had 48 townhomes. Built around 2003-2005. Most were owner-occupied, and those were very stable. Nice working people, paid their bills, no foreclosures. But about a half-dozen were purchased by a single, out-of-state investor. They put in some renters, didn't seem to screen them very carefully. Revolving door. A few years down the road, they all went into foreclosure. Property values sank as these stupid houses went for peanuts.

Bad timing, bad investment...

I suspect the previous poster is correct, the housing market crash hit the third ward just as builders had gotten started there, so it really took a hit.

[rbarz]

My evidence is limited to what I saw happen in one townhome community in the third ward, but perhaps it is indicative of a wider trend. There, we had 48 townhomes. Built around 2003-2005. Most were owner-occupied, and those were very stable. Nice working people, paid their bills, no foreclosures. But about a half-dozen were purchased by a single, out-of-state investor. They put in some renters, didn't seem to screen them very carefully. Revolving door. A few years down the road, they all went into foreclosure. Property values sank as these stupid houses went for peanuts.

Bad timing, bad investment...

I suspect the previous poster is correct, the housing market crash hit the third ward just as builders had gotten started there, so it really took a hit.

That case was most likely a straw buyer scam too. They buy the homes put renters in them and collect rent but never pay the mortgages. Some scams pay the mortgages for a few months to pretend that they didn't intend on letting them go. But, There is no way you can buy a brand new home and pay for it with renters without at least 30% down (much less actually turn a profit). And of course if they put that much down they would never go into forclosure.

[sarahiki]

That case was most likely a straw buyer scam too. They buy the homes put renters in them and collect rent but never pay the mortgages. Some scams pay the mortgages for a few months to pretend that they didn't intend on letting them go. But, There is no way you can buy a brand new home and pay for it with renters without at least 30% down (much less actually turn a profit). And of course if they put that much down they would never go into forclosure.

That's interesting. Incredible that they can get away with it. I mean, they win, and the builder wins (because they sell six units all at once), but how on earth could a bank be stupid enough to fall for it? I guess that's the question of the year. Yet another reason to thank the bankers for the mess we're all in.

[kylejack]

That's interesting. Incredible that they can get away with it. I mean, they win, and the builder wins (because they sell six units all at once), but how on earth could a bank be stupid enough to fall for it? I guess that's the question of the year. Yet another reason to thank the bankers for the mess we're all in.

Banksters know they can always turn to the FDIC and the taxpayer if things go belly up. Were they stupid, or were they smart?

[sarahiki]

Banksters know they can always turn to the FDIC and the taxpayer if things go belly up. Were they stupid, or were they smart?

Hm, good point. I guess the only losers, if this was the case, were me, my neighbors, and the taxpaying public in general.

[Yankee_in_TX]

As a BK attorney, I've seen two general groups of folks that are losing/lost/may lose their house:

1. Used to make a TON of money, usually commission based jobs. Spent every penny they made. Economy tanks, maybe they get laid off, maybe they're just not making squat. Suddenly they can't make a $2500+/mos. mortgage payment.

2. People who over bought before the real estate market crashed. They really couldn't afford the house in the first place, but made everything float with a ton of credit cards. Cards get maxed/companies lower limits/etc. You do a budget with the people to see - if they no longer have to pay the credit cards can they afford their house? Usually they haven't been paying on their credit cards any way, they just can't afford the house.