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VOL. 127 | NO. 77 | Thursday, April 19, 2012

Foreclosures Up 30 Pct. in Q1

By Andy Meek

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The timing and backdrop seem fitting. During the first quarter of 2012, the same three-month period in which the state of Tennessee announced its participation in a $25 billion settlement with some of the biggest lenders over foreclosure abuses, the number of foreclosures in Shelby County swelled by almost 30 percent.

From Q1 2011 to Q1 2012, the number of area foreclosures jumped from 964 to 1,235, according to real estate information company Chandler Reports, www.chandlerreports.com.

While it might seem counterintuitive in the face of foreclosure woes spreading, the number of newspaper foreclosure notices filed actually dropped from Q1 2011 to Q1 2012 – by nearly the same amount that the number of foreclosures rose.

There were about 30 percent fewer notices during the first three months of this year compared to the same time in 2011. However, legislative tweaking in the recent past has modified the timing under which those notices get filed, so their correlation to the foreclosures themselves is not as direct as it once was.

The notices are still a signal of problems to come, though. They are the first indication a borrower is in danger of losing a home.

The fact the number of notices in Q1 was down in almost every major ZIP code in Shelby County is one indicator that the foreclosure problem is morphing in certain ways. It’s morphing in the sense that the problem remains acute locally, but efforts to both mitigate its effects and to manage certain aspects of the process have left an artificial quality that’s still visible.

“The homes are very slow to hit the market.”

–Steve Lockwood
Executive director, Frayser Community Development Corp.

Tim Bolding, the executive director of United Housing Inc., for example, lamented that the stages of the process aren’t unfolding according to their historic pattern.

“I think the shadow inventory out there is kind of out of control,” he said. “What I mean is, there just appears to be more and more properties that are sitting out there empty with a lockbox on them. They haven’t moved to a listing yet, and so they’re just sitting there. What’s preventing them from moving to a listing, I don’t know.”

The problem extends from the county’s suburban fringe to hard-hit neighborhoods in the inner city. There was at least a 70 percent increase in foreclosures from Q1 2011 to Q1 2012 in Collierville (38017), North Memphis (38107), Jackson/Farmville (38018) and Bartlett/Brunswick (38133).

Bolding’s organization is particularly active in the neighborhoods around Frayser and Raleigh. He not only monitors the foreclosure notices that get published – he looks at them every morning with breakfast.

It’s in an effort to get a handle on the scope of the problem, if it’s changing and where his housing agency’s resources can best be directed.

“We just got another smaller (Neighborhood Stabilization Program) grant, and we’re buying properties right and left,” Bolding said. “We’re also starting to see the banks want to essentially give some away. I’ve never quite seen that before.”

Steve Lockwood, executive director of the Frayser Community Development Corp., said he’s running into the same thing in Frayser.

“The homes are very slow to hit the market,” he said. “That doesn’t mean they’re not being foreclosed on. But they’re not getting back on the market. I keep hearing it’s going to be fast, once it happens. I, of course, don’t want foreclosures, but if they’re going to be foreclosed I want them to get back out there on the market again, and I don’t see that happening much. The other thing for us that’s kind of weird is we’re getting an awful lot of availability of free houses the banks are dumping on us.”

Chandler Reports is a division of The Daily News Publishing Co. Inc.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 70 125 13,455
MORTGAGES 119 192 17,541
FORECLOSURE NOTICES 19 51 3,442
BUILDING PERMITS 146 769 31,699
BANKRUPTCIES 62 128 12,823
BUSINESS LICENSES 40 51 4,648
UTILITY CONNECTIONS 80 233 19,690
MARRIAGE LICENSES 25 69 4,129

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