Texas Hill Country residents are not immune to the nation’s economic slump.

Monthly financial statements reflect Wall Street losses that impact savings and may call for a re-evaluation of long range plans. Cattle prices have been on the decline at local auction dealers.

Nationwide, home mortgage foreclosure rates are rising. For the first ten months of 2008, 168 mortgage foreclosure notices were filed in Llano County. In 2007, 123 notices of mortgage foreclosure were filed in Llano County.

Horseshoe Bay properties account for a noticeable percentage of the foreclosure notices. In 2007, 44 of the 123 foreclosure notices (36%) in Llano County were filed on HSB properties.

From January through October 2008, 74 of the 168 foreclosure notices (44%) covered HSB real estate.

Raw numbers can be deceptive, however. A single developer or builder who hits financial problems may account for multiple filings.

Of the 74 foreclosure notices in Horseshoe Bay during 2008, one investor was the debtor on 13 of the notices, but none of the properties was foreclosed upon as the investor was able to renegotiate all the loans.

Mostly out of state purchasers at The Waters high rise condominium project in HSB accounted for 12 foreclosure notices.

Removing those two special cases of notices reduces the number of HSB filings to almost the same rate as 2007.

Although the number of foreclosure notices in 2008 of Horseshoe Bay properties has increased over the same ten months in 2007, that number represent less than 1% of the 10,000 properties in HSB.

Many of the HSB foreclosure notices relate to undeveloped lots, not residential households.

The national real estate lending crisis is being felt more acutely in some parts of the nation with foreclosure filings of 20% of total properties in some areas of California, Florida, Arizona and Nevada. Pockets along the Eastern seaboard and the Great Lakes industrial regions also have seen high foreclosure filings.

Marble Falls attorney Robert Klaeger handles many real estate transactions and has filed some recent notices of foreclosure on local properties. Klaeger said the current economic climate resembles the 1980’s downturn. “The Texas Hill Country economy was hit later than the rest of the nation and pulled out faster.”

Filing a foreclosure sale notice does not mean the property will actually be foreclosed upon or sold.

Often the notice is a first step in restructuring the underlying indebtedness in today’s lending environment.

Despite talk of lenders working with borrowers to voluntarily lower payments to avoid foreclosure, some debtors said their lender would not discuss lowering payments until after the mortgage went into default status and foreclosure steps were underway.

A local real estate investor said he was unable to talk with lenders about modifying his mortgages because the loans had been packaged and re-sold in groups to the wholesale market.

He found himself talking to clerks in a variety of mortgage servicing companies across the nation who sometimes could not even locate his paperwork.

Many of the names shown as the beneficiary on the foreclosure notices are familiar national lenders – Countrywide Home Loans, Citi Mortgage, Bank of America, Wells Fargo Bank and JP Morgan Chase Bank. Some were familiar local names such as Lake LBJ Improvement Corporation, the company founded by Wayne and Norman Hurd to develop Horseshoe Bay.

But many beneficiaries’ names are relatively unknown to the retail consumer, such as a variety of mortgage service companies and the new kid on the block, Mortgage Electronic Registration Systems, Inc. (“MERS”).

MERS was created by the mortgage banking industry to streamline the mortgage process by using electronic commerce to eliminate paper. Its goal is to “register every mortgage loan in the United States.” MERS acts as the “nominee” for the lender.

MERS’ list of shareholders is a Who’s Who in the mortgage lending industry, including recently bailed out Fannie Mae and Freddie Mac.

Burnet County records show a gradual increase in foreclosure notices year to date over last year.

For the four month period August through November 2007, 78 notices of foreclosure were filed. For the same four months in 2008, 96 foreclosure notices were filed, which amounts to a 23% increase in filings.

Chapter 51 of the Texas Property Code requires a lender to file a notice of a foreclosure 21 days prior to a non-judicial sale of the property.

If the property is a debtor’s residence, Texas law requires a 20 day cure period before filing the notice of foreclosure. Foreclosure sales are held the first Tuesday of every month, usually on the county courthouse steps.

Tuesday, December 2 is the next scheduled foreclosure sale date. Historically, December foreclosure notices and sales have been fewer in number than other months. Perhaps even lenders get caught up in spirit of the holiday season.