Foreclosures hit historic low in North Texas. Are they heading back up?

In November, 969 foreclosure auctions or bank repossessions were recorded in North Texas courthouses.
In November, 969 foreclosure auctions or bank repossessions were recorded in North Texas courthouses. Star-Telegram archives

A decade after the housing market crashed, foreclosures in Dallas-Fort Worth have slowed to a trickle.

Fewer than 1,000 homes are taken each month from owners who haven’t kept up with mortgage payments in the Dallas-Fort Worth-Arlington area.

But could they be on the verge of going back up?

“We’re seeing a little bit of a hint, with increasing foreclosure activity,” said Daren Blomquist, a senior vice president at Attom Data Solutions, a California company that closely tracks foreclosures nationwide.

In November, only 969 foreclosure auctions or bank repossessions were recorded in North Texas courthouses. In October, there were 885 foreclosure activities, and in September there were 775.

That’s a far cry from the peak of the housing bust, which was a major factor in the Great Recession that nearly brought the global economy to its knees in 2006-10.

In January 2006, there were 8,748 auctions or bank repossessions of foreclosed homes in North Texas.

During the recession, roughly 7,000 to 8,000 people lost their homes each month in Dallas-Fort Worth, according to Attom Data.

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JoAnn Haynes, left, records a sale by substitute trustee Nan Potter, right on tthe Tarrant County courthouse steps in 2009 during a foreclosure auction. Joyce Marshall Star-Telegram archives

Long-term indicators point to a successful recovery of the residential real estate market. Banks are doing a better job lending their money, and job growth and higher residential property values ensure home owners should have enough money to keep making their monthly mortgage payments, researchers and analysts say.

“It took a decade, but we are now back to our historical numbers,” said Lawrence Yun, chief economist for the National Association of Realtors.

The Dallas-Fort Worth-Arlington market didn’t suffer nearly as much during the housing crisis as Las Vegas and many communities in California and Florida. Also, in cities such as New York and Philadelphia foreclosure rates remain high.

But even so, Blomquist is concerned about some small indicators he is seeing in North Texas since this past summer.

Foreclosures remain historically low, but Attom Data’s monthly data figures show the number of foreclosures has been higher than the same month a year earlier in five of the past six months.

It could be a sign that lenders are going back to their old ways and approving risky loans, he said.

The Trump administration has proposed rolling back some of the restrictions on the mortgage industry enacted as part of the 2010 Dodd-Frank Act (some of the changes have met with resistance in Congress).

“In five of the last six months, we’ve seen a year-over-year increase (in auctions and bank repossessions) and that kind of pattern does indicate to me that there is some loosening of the lending standard,” he said. “In the peak of the Great Recession, in 2009 and 2010 there was some regulation tightening, but it is gradually starting to loosen and we’re starting to see the result of that.”

At the very least, Blomquist says the rate of foreclosures in North Texas has gotten about as low as it is probably going to get.

Banks hold on

Also, in North Texas there could be less foreclosure activity on the courthouse steps because banks are holding onto repossessed properties and waiting until they find a seller willing to pay a higher price.

Home values have skyrocketed 33 percent in the Dallas-Fort Worth area just since 2014, and the median home value in Tarrant County is now $249,000. That’s compared to $188,300 three years ago and $150,900 in 2007 during the housing bust.

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A foreclosed home for sale in 2009 in the 7700 block of Portman in east Fort Worth. Rodger Mallison Star-Telegram archives

With values steadily rising, banks may be content to hang on to the vacant properties and simply pay the property taxes until they find a buyer willing to pay top price, said J.R. Martinez, president of the Greater Fort Worth Association of Realtors.

As an example, Martinez said one of his relatives lives in Haltom City across the street from a home that was acquired by a bank through a reverse mortgage. It has remained vacant for two years.

“The lady died, and the house hasn’t been occupied for two years now,” he said. “The bank foreclosed on it, but still hasn’t put it on the market. Banks don’t just give the houses away. Even at auctions, just because a house is available at auction and someone makes a bid and gets it, that doesn’t mean the bank will accept it.”

Gordon Dickson: 817-390-7796, @gdickson