A total of 120 properties in McLennan County have been posted for foreclosure in February, 36 percent more than were posted in February of last year, Foreclosure Listing Service reports.

McLennan County’s increase in foreclosures “is the highest in our coverage area,” said George Roddy Sr., president of the listing service.

For the calendar year, 241 properties have been posted for foreclosure in McLennan County, compared to 204 posted during the first two months of last year.
Duane A. Laverty / Waco Tribune-Herald

Besides McLennan County, FLS tracks foreclosures in the Central Texas counties of Travis, Williamson, Hays, Bastrop, Bell, Bexar, Comal and Guadalupe, and in the Austin metropolitan area.

Of the 120 postings for February, 108 involve single-family homes, Roddy said.

Not all properties listed for foreclosure end up being sold on the courthouse steps. For example, W.H. Littles & Sons Mortuary in East Waco has been posted for foreclosure on at least two occasions. But it was pulled from the list last month when the owners, Glenn and Myrtle Littles, filed for personal bankruptcy protection.

For the calendar year, 241 properties have been posted for foreclosure in McLennan County, 18 percent more than the 204 posted during the first two months of last year.

Other counties may not have seen a 36 percent increase in February, but several saw jumps of more than 20 percent.

“I think the surge we’re seeing now is due to the slowdown we saw in November and December, when some lenders discovered they were not carrying out the foreclosure process correctly,” Roddy said. “Some lenders didn’t foreclose on property or even post properties for foreclosure until they re-evaluated their posting process. So what happened? They took a month or two to get their ducks in a row, and now they’re coming back hard.”

The Federal Housing Finance Agency in October announced guidelines that mortgage servicers must follow in reviewing problems with foreclosure procedures. Officials in 49 states announced probes.

Several major lenders, including GMAC Mortgage and JPMorgan Chase, said they were freezing foreclosures in at least 23 states where the foreclosure process requires court involvement.

Texas has judicial and nonjudicial foreclosures, with some involving courts, though not all.

Bank of America stopped foreclosures in all 50 states, but it announced Dec. 9 it would resume sales involving vacant properties in hopes of reducing “the number of abandoned properties across the country.”

About 16 percent of the homes posted for foreclosure in McLennan County in February and February of last year involve owners who are upside-down on their mortgages, meaning they owe more than the property is worth.

“That obviously adds to the problem,” Roddy said. “If you’re in a house that’s not worth what you owe and you’re struggling to make payments, you have a tendency to get up and walk away.”

Some may try to sell their homes, he said, but they won’t get enough to pay off their debt.

Kim Galvan, CEO and broker of Keller Williams Realty Waco, said her office has a growing inventory of houses that have been foreclosed upon and houses that lenders are willing to sell for less than market value.

Taking less than market value is not ideal for lenders, but it beats going through the foreclosure process, Galvan said.

“Banks are in the business of loaning money, not managing property,” he said.

mcopeland@wacotrib.com

757-5736