Number of foreclosures in Cape County on track to top record from last year

Foreclosures are at record highs across the country, and Cape Girardeau County is no exception.

"This is broad and widespread," said Janet Robert, who has served as Cape Girardeau County recorder of deeds for 33 years. "It's affecting all subdivisions and all segments of the population, no matter their income."

So far this year 104 foreclosures have been filed in Cape Girardeau County, a number on track to easily break last year's record, Robert said. Over the past four years, foreclosures in the county have increased, from 149 in 2007 to 170 in 2008 to 186 in 2009.

"Most of the time in a foreclosure situation you have a good person that something bad has happened to," said Dawn Dauer, senior vice president of Bank of Missouri in Cape Girardeau.

Reasons for the recent spike in foreclosure rates include job losses, lost profits for business owners in the down economy and divorce situations where the partner who keeps the home can't continue making the payments on just one income, Dauer said.

Across the nation more than 4.6 percent of homeowners were in foreclosure in the first quarter of this year, a record high, according to the Mortgage Bankers Association. In Missouri, 2.12 percent of homeowners were in foreclosure during the first quarter. Alaska was the state with the lowest foreclosure rate at 1.34 percent, and Nevada was the highest at 14.03 percent.

The foreclosure process is a bank's last resort, Dauer said.

"We want to make sure that we have exhausted all the options that are available to help our customers," she said.

Banks don't want to get into the real estate business because it ends up costing them both time and money, Dauer said.

"In a typical foreclosure, someone loses money," said Kevin Greaser, community bank president at Alliance Bank in Cape Girardeau. "If the lender loses, that in and of itself drives up the cost of borrowing to other creditworthy consumers."

For homeowners facing foreclosure, bankers said communicating with them about financial troubles can help avoid further consequences.

"A lot of times people who have their backs up against the wall tend to shy away from their loan officer because they don't like bad news or are embarrassed," Dauer said. "Many times, if we know about a situation soon enough, there are many options to help remedy the situation."

Banks often offer customers having trouble making their mortgage payments lower monthly payment amounts, weekly payment schedules and even refinancing at lower interest rates.

"These options work best when your loan is only one or two payments behind," Greaser said. "The farther behind you are on your payments, the fewer options are available. Do not assume that your mortgage problem will correct itself."

According to the Mortgage Bankers Association, during the first quarter of this year 8.5 percent of Missourians with mortgages were at least 30 days behind in their payments, near the national average of 9.4 percent.

Congress has placed tighter restrictions on banks in an effort to avoid future foreclosures. Banks are forced to take a closer look at a customer's credit, ability to repay the loan and the value of collateral, all of which require more paperwork.

"Some of the changes are for the better, because it brings all lenders to a higher standard," Dauer said. "However, it also limits lenders on being able to help that person they have known for years because they may not meet one of the parameters of the regulation."

Many homebuyers are hoping to get a deal by paying just pennies on the dollar for foreclosed properties, but this just doesn't happen, said Liz Lockhart, a broker at Century 21 Key Realty in Cape Girardeau who specializes in foreclosed properties.

Foreclosed homes usually end up at a selling price that is less than the last price the house sold for, Lockhart said, but just because a home has been foreclosed on doesn't mean a lowball offer, like 50 percent of the asking price, will be accepted.

"Foreclosures are not the only deals on the market," Lockhart said. "Most foreclosed homes sell for 90 to 100 percent of the listed price."

For those looking for a foreclosed property, there is a larger inventory of foreclosures on the market now than in the past, she said.

"The foreclosures we're getting now were sold during the boom times, and they are better houses than ones that foreclosed two years ago," Lockhart said. "The ones two years ago may have been troubled loans to begin with. Houses foreclosing now had qualified buyers."

Lockhart said buying a foreclosed property does require more patience and additional paperwork. Most foreclosures are listed on the regular housing market, she said.

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