Spring Valley Lake Communities Face Foreclosure Crisis

August 27th, 2007

Though the people residing at the Country Club of Spring Valley Lake are from various communities and part of different cultures, one thing that is common among them is the term “foreclosure”.

There are about 4210 families staying in the country-club community area, and the ratio of foreclosure is approximately 1 for every 41 households since the last seven months. Real estate agents are acquiring foreclosure properties from everywhere i.e. Victor Valley, Mountain resort communities and so on. The number is increasing irrespective of the value of the house.

The crisis in the sub-prime market is making lenders cautious about making any such deals again in the future. Now lenders are finding very difficult to trust anyone with such heavy debt amounts. Besides, it can cause great psychological trauma to the house owners. Those who cannot afford to pay the money vacate the house, and this leads to a deep pervading sense of loss and helplessness. It has a great devastating effect on the neighborhood as well. People don’t like to leave in an ambience which is surrounded by empty houses with a big “resale” sign in front of them. Plus the effect on the cleanliness of the area is an added pressure. Real estate agents are paying Homeowner’s Association (HOA) in Spring Valley Lake to keep the surroundings of the empty houses clean so that it does not have a negative effect on the property values.

The board of directors of the HOA has put the responsibility of cleaning the neighborhood either on the banks or on the real estate agents. And therefore, they are paying for the staff’s wages to the HOA. The amount budgeted for this by HOA is around $15,100. This also includes fees paid to court for allowing them to enter the premises of these homes. $40100 is budgeted for any losses incurred due to unpaid wages. These efforts have been taken up by the HOA to demonstrate to the residing people their concerns about the impact on property values.

There are many cases in the Spring Valley where the owners have bought the house thinking that they can pay the mortgage from their annual income, but unfortunately, the reality turns out to be something else and their properties are foreclosed.

Property agents believe that the situation in the market will continue like this for two to three years more in the Spring valley Lake area. The piled up stock of real estate inventory has become so high that property dealers will take almost three years to square it off. This is possible only if they do not include any more foreclosed homes in the list, which continues to grow with each passing month.