Report Puts McAllen LOW on List of Foreclosures : Alliance Academy

Sunday, August 13, 2006 - Report Puts McAllen LOW on List of Foreclosures

Excerpts from....
Report Puts McAllen LOW on List of Foreclosures
August 12,2006
Kyle Arnold
Staff Writer for The Monitor

McALLEN — Mortgage lenders apparently have little to fear in the Upper Rio Grande Valley.

The McAllen area boasts some of the lowest home foreclosure rates of any metropolitan area in the country, according to a report from RealtyTrac, a Web site that monitors and lists foreclosed properties.
Many attribute the low rates to the area’s strong Hispanic culture, which emphasizes owning property as a marker of success.

Among the 100 largest markets in the country during the second quarter of 2006, the McAllen-Edinburg-Mission area ranked 91, while Texas’ four largest cities floundered, all ranking within the top 10.

Only one in every 2,569 homes in the McAllen area is foreclosed, while the national average is one in every 425 households. In San Antonio, one in every 166 homes is tagged with foreclosure, and in Dallas, the worst city in Texas, one in every 112 homes is foreclosed.

Despite figures showing Hidalgo County as one of the poorest urban areas in the nation, local lenders say Valley residents are reliable, keeping foreclosure rates down and making life easier on mortgage brokers.

"I think the reason that the South Texasregion is like that is because the Hispanic community values their homestead versus other liabilities," said Valerie Cardenas, head of mortgage and lending for IBC in
McAllen. "To them, the mortgage payment is the most sacred and they’ll pay that before other areas."

It is not any news to those in the industry either. Cardenas said she and her staff are allowed more discretion with home loans because of border borrowers’ historical reliability.

The McAllen-Edinburg-Mission metro area only listed 75 foreclosures between April and June. It’s no wonder that McAllen job growth is so strong, said Rick Sharga, a spokesman for RealtyTrac. He said strong, stable housing markets and economies are common denominators in many areas touting low foreclosure rates.

But while McAllen enjoys a low number of people losing their homes, it’s a different story in other parts of the country as the backlash begins on the housing boom of the last four years. Many people overextended themselves getting into homes when interest rates where low, and as rates have climbed nationwide, many homeowners have been forced to bail out on their mortgages as the prices of their monthly payments grow, Gaines said.

"The reset on the interest rates are hitting a lot of people really hard … there’s higher utility costs and property taxes," Gaines said.

In general, Sharga said, those homebuyers with adjustable-rate mortgages can expect a 20 to 50 percent increase in their home mortgages starting in the fall, meaning more people could lose their homes as the second arms of their mortgages set in — even here in the Valley.

Contributed by Tony Chapa, Expanded Mortgage Credit

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Sunday, August 13, 2006 - Report Puts McAllen LOW on List of Foreclosures

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