Home foreclosures still pestering market

High-dollar home foreclosures are the latest trend in a soured home market.

“Compared to this time a year ago, we’re seeing a lot more higher-end homes that are in various stages of foreclosure,” said Charlie Nelson, owner of Midwest Metro Foreclosures, who declined to disclose volumes citing nondisclosure agreements.

Midwest Metro secures and maintains properties repossessed by lenders after borrowers default on loans. The company works with major banks such as Bank of America, Chase, Citibank and Wells Fargo, and operates in Missouri, Arkansas, Oklahoma and parts of Illinois and Kansas.

The reason for the increase, according to Bob Berlin, Empire Bank’s acting senior lending officer and commercial loan team leader, is the difficulty in obtaining financing for more-expensive homes.

Berlin said Empire Bank’s percentage of nonperforming loans stands at 0.86 percent, up slightly from 0.71 percent at this time last year. “We’re still well within regulatory guidelines, but it is running higher than a year ago. It’s still a very manageable figure.”

There were more than 20 homes valued at more than $200,000 in foreclosure published in The Daily Events during the month of April, including a $1.76 million property on West Farm Road 186. Springfield’s fourth-quarter average home price was $134,100 with 2,137 homes on the market and 916 sold, according to the Greater Springfield Board of Realtors site, www.gsbor.com. There are 44 Springfield homes valued at $200,000 or higher in foreclosure, according to RealtyTrac, an online tracker of foreclosure properties.

Berlin said factors include a weak home market making it hard to obtain accurate appraisals and sale comparisons. It’s also more difficult for borrowers to get approved for jumbo loans. “They’re underwritten very carefully by the secondary market,” Berlin said.

Another reason, according to Nelson, is the nation’s high jobless numbers.

“The unemployment rate is affecting people in middle and upper management now as companies cut back and are looking at ways to reduce their bottom line,” he said. “They’re not just looking at line workers; they’re cutting management out of these organizations.”

The numbers
There are 910 homes actively in foreclosure in Springfield, according to RealtyTrac.

The upside is that the number of Springfield homes entering foreclosure this year has been declining slightly. New home foreclosures dropped to 162 in April, from 178 recorded in March, according to RealtyTrac. Springfield’s first-quarter 2010 numbers also dropped, to 430 compared from 521 in fourth-quarter 2009.

Missouri’s 9,080 home foreclosures during the first quarter of 2010 represent a 9.5 percent increase from fourth-quarter 2009 and a 24.5 percent hike from first-quarter 2009, according to RealtyTrac. The overall number ranks 30th in the nation.

Nationwide, where home foreclosures increased 7.2 percent during the first quarter and rose 16 percent compared to first quarter 2009, the number of high-dollar homes entering foreclosure is on the rise.

According to an April 9 Wall Street Journal report, 352 U.S. homes valued at $5 million or more were in foreclosure through February, compared to 1,312 homes in all of 2009.

According to the 2006–08 U.S. Census American Community Survey, 689 homes in Springfield were valued at $500,000 or more.

According to RealtyTrac, the home-price range with the most foreclosures in Greene County is $100,000 to $200,000, with 323 bank-owned homes, followed by less than $100,000 with 303 bank-owned homes and $200,000 to $300,000, with 66 bank-owned homes.

“People that are upside down in their homes, in some cases, will just walk away from them,” Nelson said. “A few years ago that was unheard of.”[[In-content Ad]]