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A2 NEWS Portland Tribune Thursday, October 16, 2008

Mortgage: Poorer areas are harder hit


■ From page 1
we’re failing on all cylinders,” said
Portland real estate economist
Jerry Johnson.
Portland took longer than most
cities to emerge from the last re-
cession and didn’t get as overbuilt
as other markets, Johnson said.
But Portland home prices kept
rising during the last recession, he
noted. If banks and besieged
homeowners try to dump too
many discounted properties, he
said, “you could swamp the mar-
ket and kill the guys who are OK.”
Home prices are sliding in
large swaths of the metro area,
especially in overbuilt sectors
such as Portland’s condo market
and suburban Happy Valley. In
early October, in the 97086 ZIP
code that includes Happy Valley,
there were 247 homeowners fac-
ing foreclosure on top of 95 homes
seized by banks, according to Vi-
sionCore, a division of First
American CoreLogic.

Short sales drive down prices


Many overburdened homeown-
ers, anxious to avoid foreclosures
that soil their credit ratings, are
resorting to “short sales,” in
which they sell quickly for less
than their home loan if the lender
agrees to accept the lower
amount. Banks also are auction- TRIBUNE PHOTO: L.E. BASKOW
ing off seized homes to investors Karen Rider (foreground), an agent for a trustee sale officer, conducts an auction of foreclosed homes on the Multnomah County Courthouse steps just inside the building.
looking for sweet deals.
Dumping all those distressed longtime residents.
properties on the market, some-
times at fire-sale prices, is de-
Mark Myer, 57, who lost his
computer tech job after his com- Changes to
pressing home values for neigh-
boring residences.
pany was sold, doesn’t expect any
of the $700 billion Wall Street
bankruptcy code
In a half-block stretch of Liebe bailout approved by Congress Oct. sought
Street southeast of Holgate Boule- 3 will trickle down to his end of
vard and 118th Avenue, four the food chain. Once Wall Street power-
homes went into foreclosure in re- “The people that are stomping house Lehman Brothers
cent months. Investor Mark Bord- on the individuals are the ones gets to bankruptcy court, a
cosh snapped up one of them, a that got bailed out,” Myer said. “If judge will have the power to
three-bedroom townhouse ap- they share and start helping out relieve some of its debts.
praised at $217,000, and offered it some people, fine. History shows If an affluent Portland fami-
in an auction, they’ll just turn around and stomp ly declares bankruptcy, a
on us again.” judge can reduce the mort-
Foreclosure with a mini-
mum bid of Myer landed part-time work, gage payments on their
forum $137,500. but said employers have been re- Oceanside vacation home.
Oregon’s presumed “I’m basically luctant to hire him now that But if a bankrupt single
next attorney gener- getting the there’s a foreclosure on his mother with a two-year-old
al, John Kroger, house at a dis- record. That’s despite 22 years’ Hyundai wants relief on her
along with state count and I’m service in the Navy. mortgage or car loan, forget it.
lawmakers and The U.S. bankruptcy code
selling it at a Judy Myer stopped taking med-
community leaders, forbids judges to restructure
will host a town hall discount,” he icines a year ago for her anxiety
said. attacks, high blood pressure and loans on someone’s primary
for people facing
foreclosure or who All parts of cholesterol. After two heart at- COURTESY OF VISIONCORE, A DIVISION OF FIRST AMERICAN CORELOGIC residence or car, if they’ve
think they were vic- the city are see- tacks, two back surgeries and Orange and yellow signs show homes that were in foreclosure proceedings in early October. Green signs show held the car less than 910 days.
timized by decep- ing some fore- anxiety problems, she’s not in properties seized by lenders. To view properties in foreclosure near your home, go to www.realquest.com. Portland consumer advo-
tive lending prac- closures, good shape to work outside the Fill in your address in the search box near the top of the screen. cate Angela Martin says it’s
tices. though they are home. time to change this unequal
The event, called less common on “I don’t know what’s going to treatment.
There’s No Place
the west side happen. It’s just scary,” she said. Homeowners at risk Letting an impartial bank-
Like Home, takes ruptcy judge rework troubled
place 9 a.m. to 2 and close-in “We’ll never be able to go out and The number of Multnomah County homeowners getting slapped with “notices of default” on their mortgages has almost doubled
have dinner and a movie.” in the last year, and is topping levels seen during the 2001-02 recession. Such notices are a required step before a lender seizes mortgages could keep many
p.m. Saturday, Nov. east-side neigh-
22, at Portland borhoods, ac- Her son, Steve, an automotive the home via foreclosure and sells it. Figures show average monthly default notices for each quarter. people in their homes, said
Community cording to Vi- technician, was denied workers’ 350 Martin, who works on preda-
College’s Cascade sionCore. Port- compensation benefits after his tory lending issues for Our
300 237 232
campus, Moriarty land working- 2006 on-the-job injury. The injury Oregon, a union-backed advo-
Auditorium, at the class neighbor- was deemed connected to a pre- 250 cacy group.
corner of North 306 “This is a piece that would-
hoods, especial- existing condition. He qualified for
Killingsworth Street 200 n’t cost the taxpayers a dime,”
and North Albina ly in North short-term disability payments,
Portland and but that only covered 60 percent of Martin said. “It’s the same
Avenue. 150
the outer east his salary. It wasn’t enough to privilege offered to an owner
side, are getting make full mortgage payments and 100 129 of a luxury yacht.”
more than their share, as resi- pay his $10,000 hospital bill. Banks might lose some
50 profits, she said. But they
dents lose jobs or get burned by When his home lender de- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
escalating interest rates on sub- manded full payments on his would keep getting payments
2002 2003 2004 2005 2006 2007 2008
prime loans. mortgage, Steve threw up his from their borrowers instead
Main Street doesn’t necessarily hands. “I pretty much said, ‘Come Source: Multnomah County TRIBUNE GRAPHIC: PETE VOGEL of being stuck with costly fore-
have the highest proportion of and get it, there’s nothing I can closed homes. Property values
foreclosures. But it is representa- do.’ ” he said. two years. Main Street off and on since child- The house should be worth wouldn’t plunge so much,
tive of the outer east side — mean- The lender backed down and Down Main Street near 148th hood. He doesn’t earn much from about $225,000, he said. But Zitze- Martin said.
ing it is seeing plenty of angst and offered him a payment plan, Steve Avenue, Maxsim “Max” Lysack disability payments and income witz doubts he can sell it for any- Bankruptcy judges once
misery. said. He was able to save the said he was forced into foreclo- from a knife-sharpening business, thing close to that because the had the legal authority to
house for now, but said he’s still sure after his roommate died. He and moved in with his mother. market is so sour. restructure home and car
Adversity is magnified tapped financially. wound up doing a short sale — Under her reverse mortgage, Zitzewitz got married a few loans, said Keith Karnes, a
Southeast Main east of 144th A few doors down from the My- selling the home for less than his the lender takes a greater stake in months ago, but so far his wife has Salem attorney. But Congress
Avenue, dotted with modest one- ers, Trinidad Monje’s former mortgage — in a deal worked out the home’s equity each month, in been unable to find work. added an exception for car
story homes and towering firs, Main Street home sits vacant, with the lender. lieu of mortgage payments. Zitze- “We’re going to have to find loans in the 2005 bankruptcy
has long been known as an af- months after going into foreclo- “I buy it for $285,000, and I sell it witz can’t qualify for a new loan to somewhere else to live.” law overhaul, he said. The
fordable place to buy a home. But sure. Judy Myer said it’s been lan- for $250,000,” Lysack said. refinance the $160,000 his mother exception for a primary resi-
it’s no longer affordable to many guishing on the market at least Ron Zitzewitz has lived on owed. stevelaw@portlandtribune.com dence was added more than
two decades earlier.
Bankruptcy judges can
rework debts on “every other

Coming months could be grim for stressed homeowners piece of collateral in the
world,” Karnes said. “The con-
sumer who has a car or a
The future looks bleak for distressed nonprofit group, federally certified to “It’s going to be brutal,” said Steve place those risky mortgages don’t exist house really gets saddled with
Portland homeowners, despite the help people rework troubled mortgages, Emory, senior loan officer at Pacific Resi- any more, Emory said. the worst of this.”
looming $700 billion bailout of Wall is adding a third foreclosure counselor dential Mortgage in Lake Oswego. “Most of Two new Federal Housing Administra- Democratic congressional
Street investment firms. to address an expected upsurge in de- those people will not be able to refinance tion programs designed to help at-risk leaders sought to restore the
Thousands of Portland-area homeown- mand. out of those loans.” homeowners have flopped, said David residential and auto provi-
ers with risky mortgages face big interest- Tom Cusack, a retired federal housing Portland has a high concentration of Feathers, a mortgage broker with Oswego sions during negotiations over
rate spikes in coming months. official who writes the Oregon Housing homeowners with interest-only mort- Mortgage in Lake Oswego. the recent Wall Street bailout.
Area home values are slipping, and un- Blog, calculates that 17,600 Oregon home- gages, and negative-amortization loans In one of the programs, distressed But the Bush administration
employment is rising. owners have adjustable-rate subprime that permit homeowners to add to their homeowners aren’t eligible for refinanc- adamantly opposed the idea,
Home lenders are in disarray, wary of is- mortgages and other risky loans that will loan each month. Last year, Portland-area ing if they were delinquent paying their saying it was unfair to allow a
suing new loans that could help people re- reset to much-higher interest rates in the residents registered the 33rd-highest use Target credit card or similar bills. rewrite of home loans after
finance risky mortgages. next 12 months. of interest-only loans among 333 U.S. “That’s not reality,” he said, because they’re issued, and that it
“We’re going to be hit within the next 12 Interest rates for subprime and other metro areas, and 42nd-highest use of neg- homeowners are likely to experience could drive up lending costs
months,” said Cheryl Roberts, executive risky loans typically are pegged to the Lon- ative amortization loans, according to problems paying their credit card bills if and make it harder for people
director of North Portland’s African Amer- don Interbank Offered Rate or LIBOR, First American CoreLogic. Many loan they’re behind on paying their mortgage. to get loans.
ican Alliance for Homeownership. The which has rocketed in recent weeks. programs that might have helped folks re- — Steve Law — Steve Law

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