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Property Tax Funding Blog

Texas Property Tax Loan Foreclosure Stats That Will Surprise You

Posted by Joe Thompson on Mon, Dec 29, 2014 @ 04:12 AM

It’s no secret that the entire nation—the entire world, really—has taken a beating over the past seven years where the economy is concerned.

While many of us accepted the challenge of hard times and watched as entire companies and banks fell, a lot of people had to deal with the recession much closer to home. Millions of people lost their houses due to foreclosure and countless others had to hand over their commercial buildings for the same reason.

Despite the poor economy, though, Texas has persevered with extremely low foreclosure rates by comparison, especially in the area of property tax loans.

The Top Five Worst States for Foreclosures

Before we delve into Texas’ numbers, let’s take a look at the worst states in the country by comparison. Over the past seven years, many states have posted some pretty scary numbers, but we’re going to look at current information that takes into account the first quarter of 2014:

  • Florida: 1 home in 129
  • Maryland: 1 home in 189
  • Nevada: 1 home in 224
  • Illinois: 1 home in 230
  • New Jersey: 1 home in 273

Again, keep in mind that most of these states were considered to be experiencing a “recovery” when these numbers were gathered.

Statistics for Texas

Texas, on the other hand, has seen much lower rates and the numbers are improving with each year. In 2013, the Lone Star State had 52,566 foreclosures, which represented just 1.2% of all homes. However, the rate was far lower where tax lien transfers were involved. Then, it was just 0.25% of all homes in Texas. It’s important to note that in those instances, the lender never profits from a foreclosure; the homes are sold at auction, just as a mortgage would be handled.

Many have attempted to paint a more dismal picture of the foreclosure climate in the past by highlighting the sheer number of them that have occurred in Texas. However, that’s hardly a fair indication when you consider the size of the state. Even when considering that only California is more populated than Texas, our rates are still behind some of the other states listed above.

Texas Property Tax Loans

One of the reasons Texas may have been able to keep their foreclosure percentage so low is because of property tax loans. Despite their name, these transactions are really just lien transfers. They’re designed for people who have gotten behind in their property taxes and need financial assistance to help get them back to being financially sound.

While missing a few tax payments may not seem like the end of the world, consider that, in Texas, the average tax lien in 2013 was for $12,783. That’s a lot of money, which is why so many people who find themselves burdened by missed payments need some kind of solution. Otherwise, they risk losing their property to a foreclosure.

The Popularity of Property Tax Loans

Obviously, anything is better than losing your home or commercial property. That’s why, between 2008 and 2013, this type of assistance grew from 8,949 transactions to 15,746. However, due to consumer demand, competition increased in the market during that same time. This brought residential tax lien loan closing costs down from an average of $1,259 in 2008 to just $707 in 2013. On top of that, the percentage of the entire transfer they represent has dropped by more than half—going from 17.41% in 2008 to 7.33% in 2013.

When you consider all the property owners who are taking advantage of this solution, it’s not hard to believe that Texas benefits from a $200 million tax revenue every year thanks to lien transfers. Expect this number to only climb in the future as more and more property owners seek out property tax loans.

Although the statistics behind Texas foreclosures paint a promising picture, there may also be a far more interesting story behind them. Thanks to Texas property tax loans (http://www.propertytaxfunding.com), many have been able to weather the storm and keep their home or commercial building.

Sources:

http://www.marketwatch.com/story/5-states-with-the-highest-foreclosure-rates-2014-01-23

http://www.tsahc.org/blog/post/texas-foreclosure-rates-declining-but-many-households-still-at-risk

http://www.corelogic.com/research/foreclosure-report/national-foreclosure-report-april-2013.pdf

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