Texas Real Estate Market In Much Better Condition Compared To Other States
March 25, 2008
Foreclosure rates on loans in Texas went up slightly this past year, but at a much slower clip than the national rate, according to the Mortgage Bankers Association’s latest national delinquency survey.
The Washington, D.C.-based industry organization’s survey shows that Texas’ foreclosure rate rose from 1.24 percent in the fourth quarter of 2006 to 1.36 percent in the fourth quarter of 2007.
The U.S. foreclosure rate over that same period increased from 1.19 percent to 2.04 percent.
The story was the same for the subprime loan market. A subprime loan is one that is offered at a higher interest rate to borrowers who have nicks in their credit history.
Subprime foreclosure rates for the fourth quarter of 2007 came in at 5.28 percent for Texas and 8.65 percent for the United States overall. This represented an increase over the fourth-quarter 2006 subprime foreclosure rates of 4.32 percent for Texas and 4.53 percent nationwide.
Ironically, says Doug Foster, commissioner of the Texas Department of Savings and Mortgage Lending, Texas has the lowest borrower credit scores, on average, of any other state in the country.
“That’s really bad for us because the credit score is the major factor that determines what type of loan you get,” Foster explains. “With Texas having the lowest score, you’d expect it to have a higher volume of subprime lending.”
What helped Texas, he says, is a low unemployment rate and conservative property values that haven’t gone up significantly in 10 years — unlike states on the East and West coasts.
Read the entire article “S.A. lenders say city, state positioned to weather subprime storm” written by Tamarind Phinisee at the San Antonio Business Journal.
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