‘Upside-down’ home foreclosures growing in Dallas-Fort Worth

A growing number of Dallas-Fort Worth homeowners who are losing their homes to foreclosure owe more than the property is worth.

More than 20 percent of foreclosure postings in D-FW in the first half of the year were for homes with more debt than the appraised tax value, according to a study by Foreclosure Listing Service.

That's a more than 40 percent increase in so-called upside-down postings from a year earlier, the Addison-based foreclosure tracking firm said Wednesday.

"Upside-down postings have risen at a much higher pace than overall residential foreclosure posting activity," Foreclosure Listing Service CEO George Roddy said in the report. "Generally, the homeowner cannot sell the home for what they owe on the mortgage.

"And, most often, the lender cannot sell the home after repossessing it for the amount that they have invested in the mortgage and other costs that the lender has incurred."

In the four-county D-FW area, more than 6,700 foreclosure postings in the first half of 2010 involved homes on which the debt owed was higher than the tax appraisal.

The biggest increase was in Dallas County, where the number of upside-down home mortgage postings has grown 56 percent this year.

During the same time, total foreclosure postings in Dallas County rose only 7 percent. And they were up 10 percent from a year ago for all of the D-FW area.

Recent studies estimate about 15 percent of all Dallas-area homeowners with mortgages owe more than their house is worth. They either paid too much for the property or, more likely, values have fallen in their neighborhoods due to distressed property sales and high inventories of unsold homes.

Homeowners who are underwater in their mortgages are considered much more likely to default on their loans.