Mortgage rates are still reasonable, and we are building about 7,000 new homes a year in Montana. I think (housing starts) were down about 9 percent last year, but I really don't know that that's because of (subprime market conditions). ... We have had some concerns regarding the transition from variable-rate mortgages, interest-only mortgages, zero-down mortgages, those kinds of things, but we're just not that close to it. ... Here in Lewis and Clark County, there was about a 24 percent increase in housing starts in 2006. ...What's interesting, we were talking to somebody at Freddie Mac the other day, and we're looking at the possibility of sitting down and getting some information out, because if we begin to see some foreclosures, maybe there are other things we can do to transition to normal mortgages and fixed rates and that kind of thing. So we've been waiting for the issue, but it really hasn't seemed to happen yet.
Byron Roberts, Executive Director
Montana Building Industry Association—Helena, Mont.
My office has been really focused on just finding alternative forms of lending to be able to help these people. It's through credit repair, for people who have been subprime borrowers. ... Previously, if we had a borrower that had credit above 550, we'd do what we could to get them above 580 so we can go 100 percent with them. Now, because of the market change, the industry, lending changes, we're taking people that previously had 600 and trying to get them to about 630, 640. ... We've been too spoiled for too long. There were these programs that were out there that got people who really shouldn't have been in a house into a house. I have experienced it myself, where we've bent over backwards, gotten people into a home, and the first payment, the default. And I've had to buy loans back. Right now what we're experiencing is just a natural market correction, I believe.
Andre Brazil, Branch Manager
Primary Residential Mortgage—Rapid City, S.D.
I'm in a market area that's in probably the best growth period we've ever had. So we are not immune to the problems that they've seen in other areas, and we've seen some slowdown, but for the most part, Bismarck is doing very well. ... We're not seeing anything that would cause us concern right now. We're watching, and, of course, North Dakota usually is the last one to get hit, and then we get hit the longest it seems like, once everything goes to heck. ... As far as repossessions, we've seen some, but I don't think it's that much different than in years past. Probably what we've seen is maybe some of the lenders were over-aggressive and probably put people into houses that shouldn't have been in houses in the first place.
Kent French, General Manager
Leichty Homes—Bismarck, N.D.
There is a ton of foreclosures coming on to the market every week, which is sad for some folks, but it does provide opportunities for other folks as well. ... In our soft market right now, the margins for investors aren't as good as they were two or three years ago, so there's less people doing that right now, but there are still opportunities out there. I still am working with investors who are doing that, but I would say the majority of what we're finding are more the first-time home buyers and then the investors that are looking to maybe turn these into rental. ... North Minneapolis is a mess. ... I typically work the metro area, but you're starting to see more (foreclosures) pop up in the small communities too, and I think that's just a reflection of the economy right now.
Keith Raney, Realtor
ReMax Results—Edina, Minn.
There's an increase in foreclosures that I am seeing, that much I can verify. But typically the ones that I've been seeing are not marginal cases. They're so far gone that a few percent (in interest) wouldn't have made a difference ultimately in whether they were foreclosed upon or not. In many of the cases that I'm seeing today, the reason is going to be something such as job loss or an injury/illness. ... [T]here are so many different effects that I don't think you can isolate it and say that the creative financing is the reason for the problems that I'm seeing at the present time. From a totally academic standpoint, I would expect that ultimately there's going to be a problem, but the problem is not in the creative financing itself, it's in the type of people that were able to get home loans because of the creative financing.
Bruce Zito, Bankruptcy Lawyer
BEZ Bankruptcy—Eau Claire, Wis.
I know that there are quite a few foreclosures going on right now, but I don't know if all of those are subprime or if those are just due to the economic times. ... I know nationally they're quite concerned about it ... but I don't think it's happening to any great extent here like it could be in other parts of the country. ... It's definitely a buyer's market here. A lot of people saw other people get rich between 2003 and 2005 and thought "Wow!" But now they're putting these houses on the market, and they're taking longer to sell, and they're selling at a little bit lower prices than these people thought they would get for their home.
Elmer Bessonen, Staff Appraiser
Appraisal Services—Escanaba, Mich.
