VOL. 127 | NO. 140 | Thursday, July 19, 2012
Q2 Foreclosures Up 5 Percent
By Andy Meek
Shelby County’s real estate market is still feeling the effects of foreclosure activity, with a second quarter increase in activity following an even larger one in the first quarter.
There were 1,095 foreclosures between April and June, up from 1,045 during the same period in 2011, according to real estate information company Chandler Reports, www.chandlerreports.com. That’s an increase of 5 percent.
Areas around the city that saw some of the biggest increases in foreclosure activity included Rhodes College’s 38112 ZIP (a 122 percent increase from 9 in Q2 2011 to 20 in Q2 2012), West Person/Elvis Presley’s ZIP of 38106 (from 18 to 34) and Berclair’s ZIP of 38122 (from 29 to 49).
“Generally speaking, I think everybody is still expecting it’s going to (keep rising),” said Holly Swogger, president of Memphis Investors Group, which earlier this month hosted a panel discussion titled “Everything You Want to Know About Foreclosures.” “They’re expecting that a lot of stuff is coming up for air finally and is going to show up. But I’ve actually been hearing that for a year.
“These investors are really practical people. They drive around all sections of Memphis and Shelby County, and what they see is a lot of vacant houses that don’t even have the papers in the window yet that indicate they’re going into foreclosure.”
From Q1 2011 to Q1 2012, Shelby County saw foreclosures jump from 964 to 1,235, according to Chandler data.
Almost on cue, the state of Tennessee announced its participation in a $25 billion settlement with some of the biggest lenders over foreclosure abuses. And at a recent meeting with Shelby County Commissioners to discuss recent regulatory activity around mortgages, Jeff Hill, senior counsel with the Tennessee Attorney General’s office, talked about the details of that multi-state settlement – as well as the general negative effects of foreclosures.
“Foreclosed property brings down an entire neighborhood, as everybody knows,” he said. “Once a foreclosure sale happens, the property next door drops by approximately $5,000 to $10,000 immediately. And the more there is, the more the property value drops.
“Here in Tennessee, we started an investigation because we heard from homeowners. Particularly homeowners seeking loan modifications that they were having trouble getting information. They would talk to somebody at one of five servicers, then call back a month later and get totally different information and need to follow up again. Then again a month later they’d get a different person.”
In the second quarter, another foreclosure-related legal matter in Shelby County was brought to a conclusion. The governments of Memphis and Shelby County and Wells Fargo & Co. announced a resolution to a federal lawsuit filed a few years ago against Wells by the city and county over alleged discriminatory lending practices and their contribution to area foreclosures.
That resolution includes Wells setting a five-year mortgage lending goal of $425 million here, including $125 million in home purchase lending to low- and moderate-income borrowers.
Chandler Reports is a division of The Daily News Publishing Co. Inc.