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Announcement
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Eastern Idaho Avoids Mortgage Crisis
Area Escaped Mortgage Crisis
By Chris Merrill
This document was originally published online on Tuesday, October 02, 2007
Pocatello - While the rate of foreclosures has been soaring nationwide for the past three years - each consecutive year setting a new record - Eastern Idaho has so far been insulated from this trend.
And this region is actually on pace for a decrease in foreclosures in 2007.
''Things are really good in Eastern Idaho right now,'' said Larry Bell, a mortgage loan officer with the Bank of Idaho in Pocatello. ''The thing with Eastern Idaho, compared with the big, booming areas, is we've just had slow, steady growth over the last several years.''
Bell said he believes the region has been somewhat insulated from the general trend of higher mortgage-delinquency because of a fundamentally good local economy and a fairly large inventory of affordable housing.
The national trend of investors leveraging their assets and buying houses in order to flip them for quick profits - which was popular for several years in boom markets such as California and Front Range Colorado - really hurt the real estate and mortgage lending market, Bell said.
But Eastern Idaho has been relatively free of that type of investment activity, which has helped keep the real estate market on a more even keel, he said.
''One other thing that I think has happened is I think the lower end of the pay scale in Pocatello has come up,'' he said. If anything, Bell said, the local market for home buying and mortgage lending is on an uptick.
''From our bank's standpoint we have not had a house go into foreclosure for over a year,'' Bell said. ''One reason for that is we did not participate in the subprime loan market. But our activity has been very brisk. We've closed more mortgage loans in the first eight months of this year than we did in all of 2006, and 2006 was a record year.''
The national Mortgage Bankers Association has conducted a nationwide survey of mortgage delinquency since 1953. The three quarters with the highest percentage of foreclosure starts in the history of the survey were the final quarter of 2006 and the first two quarters of 2007.
Bannock County, however, seems to be headed in the opposite direction, according to Brigette Adams, mortgage broker and owner of Portneuf Valley Mortgage, who collects data for the greater Pocatello area. According to her numbers, 2007 is on pace to have fewer foreclosures than the previous two years.
Adams keeps tabs on foreclosure starts, which is the first legal notice in foreclosure proceedings. She said there were 269 starts in 2005, 309 in 2006 and 182 as of October 1 this year.
At that rate, the county is on pace for 242 foreclosure starts in 2007, more than a 20 percent reduction compared to the previous year. The nationwide market, however, has still affected the area, she said. Even though local and regional lenders haven't been hit as hard by
loan delinquency as their counterparts in the booming markets, they have become more cautious because of the larger trend.
''If you don't have solid assets or good credit, you're not getting a loan,'' Adams said. ''Or if you do, it'll be pretty costly. We're just seeing the (larger) economy affecting many people here. It's gotten harder to do the tougher loans for first-time homeowners, people with mediocre credit, people with a lot of income but who can't prove it ...''
For Adams, that indicates that the nationwide dip in the real estate market is on its way to Pocatello. For his part, Bell believes that the local market should continue as it has, with slow, steady growth for the foreseeable future.
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