Highlands Ranch Foreclosures in 2008

The mortgage industry and bad lending habits have seen the foreclosure rates go up across the nation. The real estate bubble has bursted in many areas or at least is shrinking quite a bit. Highlands Ranch is no exception and even though we are not seeing those huge drops in house prices compared to California, Nevada, or Arizona we still get our fair share of abuse. Douglas County got lucky locking in high tax values before the lower prices were recorded and used to determine the tax value of your house.

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According to a study released by the Douglas County Libraries Highlands Ranch is ranked at the top for foreclosures in Douglas County. As of March 31, 2008 a total of 152 houses are currently under foreclosure in Highlands Ranch. This number seems very low and I think it only reflects part of reality. Driving through Highlands Ranch we are seeing lots of houses on the market. There is one across the street where I live and that neighbor is selling because she can no longer afford the mortgage payments. If the house sells before she cannot make mortgage payments anymore this house will not show up in the list of foreclosures. Still, this specific house is part of the difficult market we are seeing in Highlands Ranch. A large number of houses for sale with sellers motivated to lower prices into areas not seen for 2 years – this is driving down overall prices for everyone.

Are just the banks and mortgage lenders and brokers to blame? While I think they carry a large piece of responsibility in this mess, I also think that if one bought a house he or she could not really afford, that individual is also at fault. If your income is in a certain range, how can you assume you are able to afford a house that is totally out of your league? Sure, blame the mortgage lender – that is the easy way out. However, part of this mess just reflects how bad the financial education is many people had (or not even had). I grew up learning that I could only spend money I had in my pocket. If I did not have money to buy something specific – tough luck. Financial discipline is needed to succeed in life and to be able to retire early or at least so that you do not have work anymore after reaching 65 to make a month’s end.

Anyway – one question I really have not seen being answered anywhere is about “PMI – Private Mortgage Insurance”. When I bought my (current) house in 1999 I put only 10% down and therefore had to pay private mortgage insurance. After 2 years I was able to get rid of that PMI payment and since have paid off a large portion of my mortgage already. I would assume that many people bought houses with less than 10% down payment and that they would have to pay PMI as well. Nowhere really is mentioned that the PMI covers the lenders. The big lenders are reporting loss after loss for their quarterly reports. Did the weak lending standards also include that PMI was no longer required?

So, only 152 foreclosures in Highlands Ranch, eh?