Felipe Garcia Jr.: ‘I found out I was going to be pricing myself out of my own home.’
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Deborah Kroupa: ‘To say these are charity organizations helping the poor is insulting.’
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Rick Venable: ‘I just think more and more people are going to be squeezed out of their homes.’
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Lea Offord: ‘We had $20,000 equity when we moved in, and now we owe more than the house is worth.’
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Bob Burnitt: ‘What is going on is loan fraud, and everyone knows it.’
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Wolves in Small Print
Predatory lenders are putting more Americans in homes — and into the poor house.
By DAN MCGRAW
All Felipe Garcia Jr. really wanted to do was fix his foundation. What he ended up with instead was a Frankenstein loan that outstripped the value of his house and his ability to repay and is now destroying his credit rating.
Garcia had bought the house in Edgecliff Village just south of Interstate 20 for $63,000 in 1996, a decent stone and brick three-bedroom house with a two-car garage. Because he had served in the U.S. Army — six years of active duty plus time in the reserves — his loan was backed by the Veterans Affairs agency at 6 percent interest, with payments of about $600 a month.
But around 2000, Garcia started seeing cracks in the walls, and contractors told him the concrete slab was the problem. It was going to cost about $7,200 to fix, and Garcia figured he could get the money with a home equity loan.
That’s where the real problem started. About that time, Garcia, 48, said he started getting cold calls — he’s not sure why — from all sorts of mortgage lenders, including California-based Ameriquest Mortgage Co. Garcia just wanted to borrow $7,200, but when he started talking to the Ameriquest representatives, they convinced him he would save money by wrapping that loan into a refinancing of his mortgage. “What they said was that if I just got the $7,200, I would have two loan payments,” Garcia said. “If I refinanced the whole thing, they said I would get the money to fix the foundation, but my monthly payments would be the same as before.”
So, Garcia went with the bigger loan, one he thought was going to be for about $70,000 with about the same interest rate. But when closing day arrived, the figures had changed, he said.
“The final figures came out to around $100,000 with all the fees and closing costs, and when I read the papers a few days later, I said ‘Goll-ee,’ ” Garcia said this week. “The new loan payments were about $900 a month. With my original loan I was paying insurance and taxes in the loan, but with the new loan I found out that that stuff wasn’t included. They told me it was a fixed interest rate, but I found out later it was variable. So every few years my interest rate was going to go higher. I found out I was going to be pricing myself out of my own home.”
Garcia believes he was a victim of predatory lending and has sued Ameriquest in state court. Predatory lending is tough to prove: In Garcia’s case, he did sign the documents, thereby agreeing to the loan provisions. But his case is just one example of a problem that is looming larger and larger over the housing industry in this country. With the lending industry deregulated in many ways, and home equity loans exploding around the country and in Texas (the last state to legalize such loans), there are now thousands of home owners like Garcia who say they have been taken unfair — and illegal — advantage of by lenders who are making millions by inflating loan amounts, housing values, fees, and their companies’ income and driving homeowners into bankruptcy, foreclosure, and worse.
Buyers aren’t the only ones screaming. Nationally and in Fort Worth, some of those working in the real estate and mortgage business are also coming forward to charge that the real estate lending business is fraught with fraud. Those professionals say that appraisals are being inflated to buoy up higher housing prices, bigger loans, and higher fees for the industry. First-time home buyers without down payments and with poor credit histories are being pushed through the mill, critics say, and come out the other side with loans they have little chance of repaying. That in turn is pushing foreclosure rates to alarmingly high levels.
Garcia remembers sitting in Ameriquest’s Arlington office, with three loan agents swarming around him pushing papers at him. “When it got closer to the deadline for closing, they pushed me and pushed me and wanted it done quickly,” he said. “I was like most people taking out loans like this. I wasn’t knowledgeable of the fine print, and they did like they do, telling me to sign here, sign here, sign here. I was done with the closing in 10 minutes, but I feel I was taken advantage of because of being naïve.”
Garcia never got the $7,200 in the new loan to fix his foundation; according to the court documents, he got only $2,800. He thought he was getting a fixed interest rate of 8.7 percent, but the fine print said it was a variable loan that’s now up to 12.4 percent. What is even more amazing is the bottom-line amount that Ameriquest loaned, compared to the value on his house and his equity in it. Texas law limits home equity loans to 80 percent of the appraised value of a home. For him to get a loan of $100,000, Garcia’s house would have to be worth around $140,000 — more than double what Garcia paid for the house just eight years earlier.
“He was supposed to have a higher cash-out [$7,200 for the foundation repair] at the end of the loan, and he never got that,” said Dallas lawyer Eric Calhoun, who is representing Garcia in the case. “The loan didn’t make any sense for him. He had a lower interest rate that was then increased” — and he still “didn’t get the money to fix his foundation.”
The troubles with the loan deepened when Garcia lost his job as a health-care worker and his marriage went on the rocks. Now he works as a stocker at a grocery store, and a $900 mortgage every month is beyond his reach. “He had some problems with his job, but he kept making the payments,” Calhoun said. “He sold his furniture to keep the payments active, but he eventually got behind. The problem here is that Ameriquest pushed a loan upon him that only made sense for them making money off him, and they disregarded many things they had told him about what the loan would be when they presented it to him for signing.”
Ameriquest has tried to foreclose on the property — and Garcia thinks that may be making it even harder for him to pull back even financially. He’s looking for a better job, but many prospective employers do credit checks — which turn up the foreclosure proceedings and may have cost him some potential health-care jobs.
Ameriquest won’t comment on specific cases, but officials said late last month that the company is setting aside $325 million to settle predatory lending cases being investigated in 30 states, including Texas. Ameriquest “continues to be engaged in discussions with a number of state attorneys general and regulators about the company’s business practices,” the company said in a statement. “We are focused on resolving the issues under discussion with these agencies and hope to reach a reasonable resolution that is fair to our customers and fair to the company.”
But recent lawsuits filed by borrowers in 20 other states echo Garcia’s claims. The filings allege a pattern of fraud, false documents, and bait-and-switch sales tactics. According to the Los Angeles Times, in a sworn statement in a California class-action case, a former loan officer named Kenneth Kendall said Ameriquest managers encouraged employees to “promise certain interest rates and fees, only to change those rates at the time of the closing.”
On the same day that Ameriquest released the news of its $325 million lawsuit fund, the White House announced that President Bush nominated California billionaire Roland E. Arnall to be ambassador to the Netherlands. Arnall is Ameriquest’s principal shareholder, and he, his wife, and their companies have been the biggest political contributors (more than $250,000) to Bush since 2002, according to the Washington Post.
And maybe that says all one needs to know about why predatory lending practices seem to be flooding the country. Politicians, who credit the deregulated lending laws with opening up the housing market to people who couldn’t get a home loan before, generally don’t see much of a problem. And new housing is stoking the economy, providing 40 percent of the 2.3 million jobs added since the 2001 recession, according to economist David Rosenberg of Merrill Lynch & Co.
But maybe the government needs to tap the brakes a bit on the theory that rising home prices are the basis for a robust economy. Some economists believe the housing prices have been rising faster than real worth, meaning the industry could fall apart and housing prices could tumble very quickly — the bursting of the “housing bubble” you may have heard about. One of the signs that housing prices might be ready to fall apart is the zooming rate of foreclosures around the country — which could indicate that high housing prices and home-purchase rates are being built on a population of borrowers who won’t be able to pay them off. Like Felipe Garcia’s house, the foundation has some big cracks in it.
But many lenders, real estate sellers, and homebuilders are trying to get just about anyone into a new home. If the buyer has to default on the loan a few years down the road, the original players don’t care. They will have cashed the checks and moved on.
For Garcia, it doesn’t add up to an economic boom but just to a lot of people being taken advantage of. “I don’t want anything for free here, I don’t want a free house,” Garcia said. “I want to pay my fair share. I just want someone to work with me so I can make my mortgage payment and make it fair for me and them. But I really felt [Ameriquest] took advantage of me, so they could make more money from me.”
By the way, if you think Garcia is now a borrower that lending companies would run away from, think again. He says he still gets calls about once a week from lenders wanting to refinance his Ameriquest loan.
For a home buyer — especially the first time out — it’s hard to know whether what’s happening to you is just the usual intimidation process or a case of predators sensing an easy kill. As Garcia pointed out, it is the “sign here, sign here, sign here” treatment. The tendency is for buyers to trust the real estate salespeople, the builders, the loan officers they’ve been working with, to get them through the high weeds.
One problem with figuring out what’s predatory and what’s not is that “subprime loans” — those with higher interest rates, higher fees, prepayment penalties, and more insurance policies — can be perfectly legal. That’s the kind of loan you get offered if you’ve got a bad credit record or not much money for a down payment. A company’s taking a bigger risk on you — and is asking for more money to do so.
“It is a complicated issue,” said John Henneberger, co-director of Texas Low Income Housing Info Service. “Some subprime loans do allow people to buy a house who might not qualify otherwise.” The practice becomes predatory, he said, when “loan scumbuckets are targeting people with crappy loans that they know will cause people to lose their houses.”
The numbers say that subprime lending, and the predatory practices that go with it, are jumping to huge levels around the country — and that race is a big factor.
According to the U.S. Department of Housing and Urban Development, subprime loans grew from a nationwide total of $35 billion in 1993 to an astonishing $607 billion in 2004. Subprime loans are now a big part of the market. From 1993 to 2001, according to the Federal Deposit Insurance Corporation, subprime refinance loans rose from .3 percent of the market to 6.5 percent. In the same period, subprime original loans for home purchases jumped from 2.1 percent to 10.1 percent of the market.
The changes, bankers say, are the result of new loan programs, lower interest rates, and the housing boom that everyone — poor and rich — want access to. But according to the Association of Community Organizations for Reform Now, which has studied the subprime lending market extensively, the race of the borrower makes a big difference in who gets steered to the higher price subprime market and who is steered the more conventional — and cheaper — prime loans. The federal government insurance underwriter Fannie Mae estimates that half of all of the subprime borrowers could have qualified for a lower cost mortgage.
According to an ACORN study based upon 2003 national data, 27.6 percent of refinance loans to African-Americans were subprime, compared to 17.6 percent for Hispanics, and 6.7 percent for whites. And the income of the borrower makes little difference: Upper-income African-Americans and Hispanics were 2.8 times more likely to be paying a subprime refinance loan than whites.
ACORN also ran numbers for 60 urban areas around the country. In Fort Worth and Arlington, the racial disparity in loans was similar to the national numbers: Almost 31 percent of loans to African-Americans were subprime, 14.6 percent of those to Hispanics — and only 8.7 percent of the loans made to whites. Upper-income black borrowers were 3.3 times more likely to be steered to higher-cost loans than whites, and Hispanics 1.5 times more likely.
The ACORN study, not surprisingly, found that more than half of loans made in Fort Worth and Arlington’s heavily minority neighborhoods were subprime. Only 10 percent of loans made in mostly white neighborhoods fell into that category.
The relationship between subprime loans and foreclosures is a close and troubling one. The FDIC estimated that one out of 20 subprime loans landed in the foreclosure pipeline in 2003. Of those with prime-rate loans, only one in 100 had entered the foreclosure process.
In Fort Worth and Dallas and, indeed, across the state, foreclosure rates are rising quickly. In the second quarter of this year, Metroplex foreclosures rose 24 percent over the same period in 2004. In June, Texas reported a 69 percent increase in foreclosures compared to the numbers just a month earlier, according to RealtyTrac Inc., a company that keeps track of those statistics. The Texas foreclosure rate is now 2.7 times the national average. Part of the reason, industry observers say, is that Texas is relatively new to home equity loans, which only became legal here in 1998, and the lending industry is pouncing on that new market. But Texas isn’t alone. Nationally, foreclosure rates rose in March in 47 states.
Are these changing numbers just the cost for making housing loans available to the poor, for allowing more people to participate in the American Dream? Or is it a result of gouging by the lending industry, which simply regards foreclosures as a cost of doing business? Opinions of economists, industry observers, and lawmakers are all over the place.
“The buyer has to watch out in buying a home or refinancing one, but you have to avoid paternalistic government regulations here as well,” said Ann Graham, a professor of law at Texas Tech University. Graham has worked as an analyst for the FDIC in Washington and has studied subprime lending for the Texas Banker’s Association. “You have to make [credit available] to people who are not just A1 credit users,” she said. “If you ask for too much government control, you’re going to make it impossible for many people to realize the American Dream of home ownership. Laws and regulations should address major abuse in appraisals, in bait-and-switch tactics, and in preying on the elderly. But legislators are always anxious to see a problem and write a law and not look at what is already on the books. This is a very complex issue, not something you give a knee-jerk reaction to.”
The Texas Legislature did pass a bill addressing predatory lending during the last session. But House Bill 955 is so complex that most people can’t figure out what it does. The new law defines banking in vague terms, makes false advertising illegal, but also reinforces restrictions on lawsuits by consumers. When it takes effect on Sept. 1, some think it will rein in unscrupulous lenders. Others think it will make the banking climate easier in Texas, drawing more lenders into the state.
And that’s another part of the problem: The mortgage business has become almost too complicated for the average consumer to understand. A 30-year fixed-rate mortgage used to be what every home buyer got. But now there are at least 150 mortgage products offered: adjustable-rate mortgages; interest-only mortgages, in which only interest is paid for the first few years of the loan; loans with a lump-sum “balloon” payment at the end; “adjustable rate mortgages,” which permit borrowers to make a monthly mortgage payment determined by one of four methods; and even a 40-year mortgage.
But one thing has not changed. For real estate sellers, homebuilders, and mortgage lenders, the bigger the loan, the more money they make — usually in commissions.
“The lenders are putting people at risk, but they don’t really care because they have gotten paid, and they move on to the next sale,” said Bedford bankruptcy attorney Richard Venable. “The big killer is going to be the variable interest rates. People are going to have higher monthly payments, and they’ll have to deal with balloon payments. I just think more and more people are going to be squeezed out of their homes, and that is very difficult to come back from. The foreclosure rate in Texas is going to go through the roof in a few years.”
The predatory lending problem is not confined to poor neighborhoods. Consider the case of Lea and Jerry Offord of Midlothian. Jerry works as a safety engineer, and Lea is a self-employed editor for medical journals. Their combined income is about $100,000 a year.
In June 2002, the Offords bought a home from a custom builder in Midlothian, paying $184,000, but financing just $163,000 because of a big down payment. The loan was made by Sebring Capital, a Dallas-based national mortgage lender, with a payment of about $1,500 a month.
The Offords did not have perfect credit but still made what seemed a good deal: a loan with a 10 percent interest rate, which would decline in two years if payments were made on time. But in late July before their first payment was even due, the Offords received a notice that their home was being foreclosed upon. Sebring had flipped the loan to a company called Homecoming Financial, another Dallas-based lending company that’s a subsidiary General Motors Acceptance Corp. According to their new GMAC contract, the Offords said, the debt was already in arrears before their first payment.
Late fees started mounting, and the Offords found they now had an additional $250 a month in “inspection fees” to pay. By January, the interest rate had gone up, under a provision that kicked in if the borrower fell behind, and the monthly payment reached $1,800. In addition, Homecoming Financial said the Offords owed $6,500 in late payments and fees.
“There were so many things they were charging us for that were just not in our contract,” Lea Offord said. “Every time we called to get answers we got the runaround. It was like chasing your own tail with these people. But when you try to rock the foreclosure boat with these people, they have the upper hand. They just throw you into foreclosure.”
When Fort Worth Weekly called Homecoming Financial for comment, the calls were referred to GMAC, which would not comment on the Offord case.
The Offords opted for bankruptcy to save their home. But in the past two years of bankruptcy dealings, the money owed the lender has continued to go up. The couple had to negotiate repayment plans. By January 2005, they owed $2,954 a month. By June, it was $3,126 a month, plus $23,000 in late fees.
“We had $20,000 equity when we moved in, and now we owe more than the house is worth,” Lea Offord said. “ I know our credit wasn’t perfect, but I just get the feeling they were trying to figure out ways to get our interest rate higher. Our interest rate now goes up every six months.
“I just think the game has changed now,” she continued. The excuse that lenders use — that the new rules get more people into home ownership — doesn’t explain what happened to them, she said. “Our mortgage was passed along to a new lender, and then all the problems started. We got in so deep, but it wasn’t all our fault. It’s almost like they wanted to do this. They forced us into a higher loan deal, and we are having real problems dealing with that.”
The Offords have been trying to find a lawyer to sue on their behalf. But it’s tough to find someone to take a case where the loan contract was signed, payments are late, and the lenders have a stable of high-priced lawyers.
Some people in the real estate business are getting tired of the racket and the fraud. “They are milking it as far as they can right now,” said Bob Burnitt, 53, who owned his own realty and appraisal company in Midlothian but has stopped doing appraisals. “Whatever it takes to keep the money circulating, the lenders and realtors and builders keep abusing the system.” If a prospective buyer really doesn’t qualify for a loan, Burnitt said, the lenders and sellers re-do the numbers until they come out right. “If the property value doesn’t work out, they inflate those numbers, too,” he said. “It’s all to make the housing prices high and the loans high. Then the commissions get higher.”
Burnitt worked in real estate appraisal for nine years but gave it up last year because he said he was forced to inflate property values, especially on refinance loans. In order to get around the Texas law that restricts refinance loans to 80 percent of the appraised home’s value, he said, the appraisal simply gets figured higher. Do that enough times, and the whole market goes up, since the real estate business is always based on comparison shopping.
“What is going on is loan fraud, and everyone knows it,” Burnitt said. “It’s not just a violation of the state’s 80 percent rule, it is a violation of federal and state law appraisal standards. It happens mostly in refinancing.
“I have done appraisals for loan officers, and when the number didn’t come in with what they wanted, I got fired and they found someone who would do it,” he continued. “Very often, I was asked to do an appraisal and then got called back two or three weeks later. They would tell me I needed to raise the value $30,000 or $40,000. Then the loan would be bigger, but they could care less if the borrower had little chance of paying it back.”
Burnitt wouldn’t name names but said the practice is pervasive across the industry. “It is just so common now, because the whole business is built around keeping prices inflated,” Burnitt continued. “I was asked to do an appraisal for a home where the couple couldn’t make the balloon payment. The monthly payment was going to go up from $700 to $1,100, so they wanted to refinance. The loan officer wanted them to have a big loan but needed the appraisal to come in at $117,000. I had a hard time even getting it to $100,000. But they found an appraiser who would do it. And I know the couple is now having a hard time making the new payments.
“The whole problem is that no one wants to fix it,” Burnitt contined. “The elected officials know what is going on, but they know that the housing industry helps them get elected. As long as the economic train is on the track and moving forward, they don’t care what goes in the firebox. But there is going to be a lot to pay when all these loans start falling apart in a few years, when interest rates are going up. It is something no one wants to think about right now. There is too much money flying around.”
Tony Dauphinot is a Fort Worth real estate salesman who has also worked closely with the mortgage lending business. He said subprime loans are being abused, both by inflating prices and running up closing fees — especially in cases where the buyer doesn’t have a down payment.
“The government has a goal of increasing home ownership among those with marginalized credit,” Dauphinot said. “That is not a bad thing on basic merit. But the real estate business is inflating prices and putting that on the backs of the risk borrowers. If not for the nothing-down market, the building business would grind to a halt.”
Dauphinot said mortgage lenders are using loopholes to get around the 6 percent cap on closing costs. The lenders are setting up umbrella corporations, Dauphinot said, that charge administrative fees that get added into the loan amount.
But what is making Dauphinot maddest is the increased use of “down payment assistance” programs that give mostly first-time buyers a “charitable” gift of the down payment money needed to close the loan under Federal Housing Administration loan rules.
Here is how it worked on a recent loan deal, coincidentally, just down the street from Felipe Garcia’s house in Edgecliff Village. According to documents sent to the buyer and obtained by the Weekly, the asking price on the home was $85,000. But the proposed buyer had bad credit, and the lender wanted a hefty down payment. So the Genesis Foundation, based in Indiana, was brought in to “give” the buyer the $7,200 down payment in return for a $595 fee that was rolled into the loan. In return, the company selling the house gave Genesis a tax-deductible “gift” of equal value and paid Genesis a $750 transaction fee.
It’s illegal for a home seller to give down payment money to a buyer, under federal lending rules. But in this case, the down payment technically came from a charity. In reality, it was just a way to move the money from one pocket to another. The new purchase price for the house was $93,000. So, in the end, the FHA (which requires at least a 3 percent down payment) was backing a higher loan with no real down payment. And instead of an $85,000 loan, the buyer now had a $93,000 loan.
“When these loans don’t get paid, the taxpayers are going to have to cover them,” said Dauphinot, who has been in the business for 30 years. “Everyone likes to portray these foundations as groups that are helping out the poor and getting them into home ownership. But it is all about getting around laws and inflating prices in the market. That house went from $85,000 to $93,000. The borrower now has a bigger loan to cover. That’s not helping the poor.”
The Genesis Foundation gave out nearly $23 million in down payment loans in 2003 (the latest year available on their 501(c)3 charitable foundation tax forms), a geometric increase from just $52,000 in 2000. Illinois-based Partners in Charity gave out $29 million in down payments in 2003. The GAO estimates there are about 50 DAs now operating, and sellers contribute almost all the money — but they get their money back on higher selling prices.
A HUD study of DAs done this year concluded that “allowing these new organizations to flourish has increased the percentage of FHA-insured households with relatively high probabilities of default and foreclosure.” In the process, the report said, credit risks are increased and the transactions contribute to price inflation.
No one at the Genesis Foundation would comment on whether their business contributes to higher home prices or default rates. But Deborah Kroupa, executive director of the Texas United Housing Program, a nonprofit corporation that advocates for moderate- and low-income housing, said she’s appalled that the practice is growing so fast and without government regulation.
“To say these are charity organizations helping the poor is insulting,” Kroupa said. “There needs to be a stop on all this. The FHA is insane for allowing this, because they are allowing 110 percent to be paid for a house by people who cannot afford that. These nonprofits are nothing more than clearinghouses for the lending industry.
“Laws were passed so that buyers couldn’t donate the down payment to a buyer, and then increase the purchase price,” Kroupa continued. “So [the lending industry] came up with a plan to launder the money through nonprofits. They are making megabucks using these nonprofits. HUD needs to see what is happening.
In June 2003, President George W. Bush proclaimed that “homeownership is more than just a symbol of the American dream; it is an important part of our way of life. Core American values of individuality, thrift, responsibility, and self-reliance are embodied in homeownership.”
That’s the mantra in the political world and the mortgage business. But the deregulation of the lending business, combined with higher housing prices, has had a dual effect on home buyers. About 69 percent of Americans, more than at any other time in history, now own their homes. In the 1970s, Americans had an average equity of 68 percent in their homes; the figure had dropped to 55 percent by 2004.
The rules and regulations are confusing; some banks are regulated by federal laws, while many mortgage lenders deal with state laws. Across the country, however, it seems that consumers get more protection from the law in buying a used car than in buying a home. The “lemon laws” in real estate, in most states, wouldn’t make a decent lemonade.
The reason is fairly simple. A company like Ameriquest can set aside $325 million for predatory practices and still find money to buy the naming rights for a baseball stadium in Arlington and spend heavily on lobbying and political contributions. Ameriquest now holds about $60 billion in loans, made by 250 branch offices across the country. And while the company is facing accusations of predatory lending practices from coast to coast, the company owner gets an ambassadorial appointment.
The banking industry “has way too much power and influence in the legislative process, and that’s why consumer issues are tougher laws to pass,” Fort Worth State Rep. Lon Burnam said. “In this particular battle, the lenders and bankers win most of the time, not the joe-blow homeowners. We can do more. The realtors have worked hard at changing some of our predatory lending laws. They are looking out for consumers, because that is their business. But we need to balance out business interest with consumers protection in a fair way.”
David O’Brien, director of Housing Opportunities of Fort Worth, a HUD-approved home buyer counseling agency, said the No. 1 thing that needs to happen is for consumers to become better educated on how to take out a home loan or refinance an existing one.
“People get embarrassed when they default on a loan and fade into the background,” O’Brien said. “They need to come forward and learn from this and make the politicians aware. I think there are a lot of sharks out in the water right now. Buying a house is the biggest ‘caveat emptor’ there is, and that is truer now than ever before.
“The real estate values will not stay high forever,” O’Brien continued. “In the late ’80s, even as the market went down, you still had equity in your house. But now we’re seeing more and more people with upside-down loans, owing more than their house is really worth.”
O’Brien wants home buyers to step away from the table — even if just for time to think. “You have to pay all these people you haven’t seen, people telling you what to do, people having control over your long term debt,” he said. “But if you can’t afford a $150,000 house, don’t do it. If the lenders are pushing the maximum amount, step back a bit. It could lead to serious trouble.”
Judge and juries have to decide, in individual cases, whether home buyers like Felipe Garcia Jr., were defrauded or whether the papers they signed were their own responsibility. But there’s no question that the loans being made across this state and others right now are contributing to rising rates of foreclosures — and the high public costs that come with those rates. Most economists agree that housing values are cyclical, so the current market will eventually cool off. The question is what the cost to home owners and to the country in general will be when that happens this time.
You can reach Dan McGraw at dan.mcgraw@fwweekly.com.
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