Resets To Cause Further Rise in Foreclosures
Tuesday, April 22nd, 2008
If the current turmoil caused by the current foreclosure levels was not enough, here is some more potentially devastating news coming your way in the California real estate market. Soon to be released by DataQuick Information Systems, a new report is supposed to show a further rise in foreclosure activity in Southern California, with more homes going under the hammer over the coming few months.
Almost 40% of all homes sales are already foreclosed homes in March, and this trend is set to continue for some time largely due to further resets in home loans that are expected mid-2008. According to research done by Pew Charitable Trusts, which is essentially a non-profit organization looking to make policy changes in public policy, this increase in foreclosure activity is likely to continue for some time, and they are expecting one foreclosed home for every thirty-three homes in the country by 2009. If this seems shocking, then the rates in Southern California are expected to be even worse with one home in every twenty oing under the hammer.
Interestingly, the report also shows that people who are paying their mortgages on time are also likely to suffer due to further fall in property prices largely caused by excessive real estate inventory as a direct result of foreclosed homes. The report foretells a $107.2 billion fall in the sale of homes along with the tax base of the state by 2009 end. This makes it roughly $14,282 fall for every homeowner on an average.
Kil Huh of the Pew Trust says “At this point, given how severe the crisis is … we’re focused on the community effects that might take place.”, while Heather Peters, who chairs the Governor’s Task Force on Non-Traditional Mortgages wants to try and help people keep their homes as far as possible. She adds “There are a lot of people who were able to qualify and make their payments at the initial interest rates but could not afford the resets, and it’s better to keep those people in their homes.”
Further notes from the report mention that the high foreclosure rate is due to sub-prime loans, and almost a quarter of all of between 2005-2006 were all from this category. 64% of these borrowers are going to feel the foreclosure pinch at some time.
If you think the scene is bad in California, then Nevada is even worse off with one in every eleven homes likely to face foreclosure, adds the report. Arizona is the state with a home out of every eighteen homes likely to end in foreclosure. The state with the lowest foreclosure rate is expected to be North Dakota, which is likely to have one home in every 165 homes foreclosed.
Search Foreclosed Homes
- California Foreclosed Homes
- Nevada Foreclosed Homes
- Arizona Foreclosed Homes
- Oregon Foreclosed Homes
- Colorado Foreclosed Homes
- Florida Foreclosed Homes
Related Foreclosure News
Popularity: 6% [?]


