Mortgage Default Information

Wichita foreclosures swell to 10-year high

BUILDER Online |

In Brief...

Debra Brown almost lost her house of 20 years earlier this year. Foreclosures in Sedgwick County surged to 367, a 10-year-high, in September. The increase was fueled in part by the foreclosure of an entire subdivision in Bentley, but those who counsel homeowners such as Brown say they are seeing more people come through their doors for help. "It started picking up this summer," said Wichita bankruptcy lawyer Bill Zimmerman. Sedgwick County leaders are keeping a close watch on foreclosures, which can affect housing values and, in turn, the taxes coming in to government checkbooks. Sedgwick County appraiser Michael Borchard said his office is studying how foreclosures are affecting property values locally. Brown said she was laid off in January from one of Wichita's aircraft plants. Brown said that was frustrating; Kevin Andrews, a housing counselor at the Urban League, said it is common. Lenders are beginning to do more modifications such as the one that helped the Browns, said Jeff Witherspoon, executive director of Consumer Credit Counseling Service in Wichita and Salina. Witherspoon said his office, which provides delinquent mortgage counseling, is seeing more people "upside down" on their homes, meaning they owe more than their home is worth, a problem common with auto loans. But Zimmerman said not everyone he's seeing in his office has been laid off. There's no doubt the foreclosure rate is rising in Sedgwick County, but how that rate will affect the community remains to be seen, said Wichita State University professor Stan Longhofer, the Stephen L. Clark Chair of Real Estate and Finance at Wichita State University and director of the Center for Real Estate and the W. Frank Barton School of Business. The foreclosure rate over the last year or so has been substantially higher than it's been in recent years," Longhofer said. Foreclosures have two major effects on neighborhoods and communities, Longhofer said. One is a "distress" effect, which Longhofer said is not that much different from any other house that is neglected or abandoned, say the house on your block where the owner never mows or paints. "The second effect that foreclosures have is what I call a supply effect," Longhofer said. "Those two homes are going to sell for different prices," Longhofer said. "The power was turned off, so the sump pump didn't work, and the basement flooded," Longhofer said.

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