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Sunday, July 27, 2008

Housing Default Filings Highest in Rio Rancho, Southwest Mesa

By Colleen Heild
Journal Investigative Reporter
          Albuquerque's Southwest Mesa and Rio Rancho have been hit the hardest by foreclosures over the past six months, according to an analysis performed for the Journal by RealtyTrac, a national foreclosure tracking company.
        But, for May 2008, Valencia County had the highest ratio of foreclosure actions to households, one for every 548 housing units.
        Sandoval County came in second with one to 607, according to RealtyTrac. That compares with one in 40 reported in Arizona, and one in 76 in California.
        Area Realtors and investors interviewed weren't surprised about where foreclosure filings are running highest.
        As for the Southwest Mesa, real estate investor Brent Freeze said, "most all of those homes are new trac homes, and they had unbelievable incentives to get people into houses."
        With special offers such as no or little down payment required, people could default and walk away more easily.
        "It's not like they had to borrow against their retirement," said Freeze, of Rio Grande Realty & Investments.
        Freeze, with his partner Todd Kruger, focuses on buying and selling foreclosed homes.
        "We've got 400 houses right now on a spreadsheet that are going to get foreclosed," Kruger said.
        Freeze said he's noticed an increase in what appears to be foreclosures involving investors.
        One Albuquerque real estate agent — who declined to be interviewed by the Journal — is listed on five foreclosure cases — including a $900,000 home in Albuquerque's High Desert development.
        Kruger recalled seeing "busloads" of investors from California converge on Rio Rancho.
        "I can't tell you how many houses in Rio Rancho I sold to investors in 2006. People that never even looked in the house," he added.
        The idea was to rent the house, count on the annual appreciation, and "they'd do it three or four (houses) at a time."
        Now, some of those same homes have fallen into foreclosure, he said.
        Their rentals didn't always pan out, he said, and "you can absorb a vacant house for only so long."
        A raft of foreclosures can sweep up other victims — such as homeowners who live nearby. A foreclosed home, which typically goes back to the lender, drives down the value of other properties in the area, Freeze said.
        "It doesn't just devalue property," said Day, of the Center for Responsible Lending. "It erodes the tax base of that community."
        Her agency predicts that more than 151,000 homes in New Mexico will lose value as a result of being neighbors to a foreclosure.