Economy sends home foreclosures soaring in Wichita
Posted on Fri, Nov. 14, 2003
By ROXANA HEGEMAN
Associated Press Writer
WICHITA, Kan. - Each week, the recession that grips Wichita becomes more evident in the most painful of ways, as 30 to 40 families, unable to make their mortgage payments, lose their homes to sheriff's auctions.
Given the fact that the Wichita area has long been dependent on the now-struggling aviation industry, home foreclosures are to be expected. Unemployment benefits and family savings have run out for thousands of laid-off aircraft workers and others unable to find work two years after the Sept. 11, 2001, terrorist attacks triggered massive layoffs in Wichita's four aircraft manufacturing plants.
As of Oct. 1, Sedgwick County had recorded 1,231 foreclosures of homes and businesses, far outpacing all of last year and twice the number of foreclosures in 2000, according to figures compiled by Security Title in Wichita. Most of those were home foreclosures, the company said.
Wichita is home to plants for The Boeing Co., Cessna Aircraft, Bombardier Aerospace and Raytheon Aircraft. The companies have cut more than 14,000 jobs since aircraft sales went soft in 2001.
Tim Schweitzer, 26, was laid off from his job as a sheet-metal worker at Boeing in December 2001 after five years with the company. His 25-year-old wife, Kristie, lost her job as a stockroom clerk at Cessna in March 2003.
For months, the Schweitzers scrambled to make their $687 monthly mortgage payment, at times getting behind and then catching up again when a tax refund check or job severance money would come in. The couple had saved money for a year before they scraped together enough in 2000 to buy their first house, a $70,000 brick home with a big yard.
They got to live in the house for three years. In May, the couple and their two daughters -- Kinsey, 5, and Haylie, 2 -- moved to a rented house owned by Tim Schweitzer's father. They signed their house's deed over to the mortgage company.
"There was no way we would be able to sell the house for what we owe on it," Tim Schweitzer said.
In Kansas, 1.15 percent of mortgage loans were in foreclosure proceedings as of June 30, according to figures compiled by the Mortgage Bankers Association of America in Washington, D.C. In addition, more than 4 percent of mortgage loans in Kansas were delinquent.
The state's foreclosure rate was slightly higher than the national rate of 1.12 percent in the second quarter of this year. The national delinquency rate on mortgage loans in the quarter was 4.48 percent.
While Wichita foreclosures are high, the foreclosure numbers for the rest of Kansas are comparable to neighboring Midwestern states. Missouri's foreclosure rate was 1.04 percent, the figures show.
The nation's highest foreclosure rates are in industrial states hurt by the manufacturing downturn, reaching 2.59 percent in Ohio and 2.56 percent in Indiana.
"Obviously, the key thing in delinquency and foreclosure is jobs," said Jay Brinkmann, vice president for the bankers' Department of Research and Economics. "It takes a paycheck, sometimes two paychecks, to support a house."
In Wichita, foreclosures bottomed out in December 1993. Since then, there has been a slow but steady increase, spiking in 2001 and 2002 amid the massive aircraft industry layoffs.
In 2000, Sedgwick County recorded 620 foreclosures. By 2001, that figure rose to 901, and in 2002, it climbed to 1,049. By September of this year, the number of foreclosures already had reached 1,231.
"Filings have picked up and become more volatile since the recession, but the increase started long before then," said Stanley Longhofer, director for Wichita State University's Center for Real Estate.
But the city's housing market -- bolstered by low mortgage interest rates -- has remained relatively stable throughout the recession, Longhofer said.
During the good years, more people took out second and third mortgages. Bigger mortgages were easier to come by as income qualifications were lowered. All of that, coupled with missed payments, back interest, late fees, attorney fees and other costs, can make it difficult for homeowners to catch up once they get behind on house payments, he said.
"It is not the housing market going into the tank that is causing the foreclosures," Longhofer said. "It is people that have allowed themselves to get in way over their head."
As for the Schweitzers, both have gone back to school -- he to study computer science, she to study cosmetology .
They dream of owning a home again.
"We are trying to use this as an opportunity," Kristie Schweitzer said. "We are trying to decide the best way to go so we don't get ourselves in a position where we get laid off and lose our home again." |
