Texas Foreclosure crisis

Texas, despite its fame for wealth and riches and close association with oil, is still suffering from the global economic crisis and foreclosure nightmare that is affecting much of the rest of America. One firm in particular though is making an effort to relieve some of the pain.

Countrywide Financial Corp is part of an initiative instigated by the Texas Attorney General’s Office whereby in sum total, a figure of $7.5 million will be given back to the victims of home foreclosure. Eligible customers who held their mortgages with the firm will be offered up to $2,500 per loan in restitution. Although this will not buy them another house, every little helps in these testing times.

As you might suspect, this package is not as a result of the generosity of the company; last year the Texas Attorney General Gregg Abbott began an investigation into the company. It became clear that Countrywide Financial had encouraged people to take out loans which were much more risky then they were told about, they also wrote loans to borrowers whom they knew would have real problems in meeting the terms – in short, they were proven to be unscrupulous and now they are being asked to pay penance, and it is proving very costly for them.

The announcement will affect 30,000 Texans whose homes were repossessed; Countrywide has now been taken over by the Bank of America which is in the process of administering the application forms so that people can find out if they are eligible.

Many observers, economists and simple hard working homeowners have now become understandably obsessed with following every move of the new Obama administration to see if any of the initiatives are going to make any immediate differences on the ground. Texans watch the news and hear of $3 trillion rescue packages but yet they still receive letters from the bank threatening foreclosure and their workplaces order books are still almost empty with the ever-present threat of unemployment looming large on the horizon.

For those homeowners in Texas who recall the drama of the 1988/89 regional recession, it is now sure that this is far more serious and looks even to be more long lasting. This credit crunch has not only affected homeowners and the property values, but business too. Generally, when banks start going under, everyone realises that no-one is safe, no-one is immune from this foreclosure crisis.

The figures and trends from 2008 are now widely available and open for interpretation. Dallas, Irving and Plano figures were all up last year in comparison to anything on record. According to some figures, the number of Dallas homes up for foreclosure was 0.9 percent in December 2008, compared to 0.8 percent in 2007, and about 3.7 percent of Dallas homes were over 90 days behind on payments. Hopefully the light at the end of the tunnel will begin to shine soon.