2008 Woodie Awards
Not quite subprime city
Dean Treftz - The Daily Iowan
Issue date: 11/29/07 Section: Metro
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Thanks to a uniquely hostile business climate, the DeBrowers have less than a year to come up with enough money to keep their Tiffin home, sell it to pay back the bank, or lose the house. They are a part of a growing number of locals struggling with their mortgages.
Johnson County has a low frequency of high-interest rate borrowing and, with the UI and UI Hospitals and Clinics' money and stable employment, has an economy that is partially resistant to the rest of the country's ills. Yet, there has been a significant increase in foreclosure filings.
The DeBrowers didn't take out a risky high-interest rate loan, nor did they borrow from an out-of-state mortgage brokers, both often associated with the current rash of foreclosures nationwide, and they want to keep it that way.
"We don't want to be in one of those instances where we have to take out one of those subprime [high-rate] loans," Linda DeBrower said. She compared it to "buying your house on credit cards."
Still, they could be a part of a growing trend in the area.
"In every stack of declaration of values I get, there are a couple of repossessions," Johnson County Assessor Bill Greazel said. He didn't even track foreclosures until recently, when he noticed a growing trend, he said.
Several years ago, foreclosures were rare, nearly always in the single digits, he said.
Though exact complete county foreclosure statistics are hard to come by, home seizures by the county to settle delinquent taxes and unpaid mortgages, known as sheriff's deeds, grew from 33 in 2006 to 40 so far this year according to the Johnson County Recorder's website. In the first half of the decade, sheriff's deeds hovered in the mid-20s. Sheriff's deeds only deal with forcible evictions and don't include voluntary foreclosures.
Overall, Iowa ranked 29th in per-household foreclosure filings in the first half of 2007, according to Realtytrac Inc., a company that compiles real-estate data. The more rural Midwest and Mountain states have fared better than the coasts. California had one foreclosure for every 69 homes compared with Iowa's one for every 407.
Viewing Comments 1 - 4 of 6
brooke
posted 11/29/07 @ 10:03 AM CST
Perhaps people should try and live on the salaries they earn, instead of spend, spend, spend on credit. It sounds to me like the people in the story decided to open a business and buy a new home at the same time, which is a huge financial stress and a REALLY bad plan. (Continued…)
Matt
posted 11/29/07 @ 3:27 PM CST
The way I read the story is they put up a nearly paid off house up as collateral for a business. The business went under and the business loans were rolled into the remaining mortgage. (Continued…)
JWHaga
posted 11/29/07 @ 3:33 PM CST
Easy Brooke..........I assume you missed the fact they rolled business loans they could have declared bankruptcy on into their home loan. Assuming they had incorporated the business that shows reponsibility which they could have avoided. (Continued…)
Dave
posted 11/29/07 @ 11:36 PM CST
How could there possibly be 22,000 more active Iowa City area real-estate listings at the end of October than there were in January? Half of the houses in the area would have to be for sale!
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