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Sign Of The Times
by
Carl Hampton
02/13/2007
Traditionally, California has had a low
foreclosure rate. However, in the last
quarter of 2006, 37,273 Default Notices were
sent to California Homeowners; an increase
of 36.9% since the previous quarter.
High appreciation and strong sales in many
areas have masked the possibility of
on-coming problems. With the cooling housing
market; higher interest rates; those
inventive loans (targeted at people with
weak or blemished credit), and prices
out-of-reach for many buyers, according to
the Center for Responsible Lending (CRL) 2.2
million American households will lose their
homes; $164 billion due to foreclosures.
A Default Notice is the prelude to
foreclosure; however, most Homeowners emerge
from this tragic situation by:
1)Refinancing: drawing on the equity of the
property to bring the mortgage payments
current OR
2)Selling the Property: using the equity of
the property to pay off the loan
Even so, earlier in the year, 32 percent of
Homeowners who found themselves in default
actually lost their homes to foreclosure; a
year ago it was only 8 percent. This is in
line with a study conducted by the Center
for Responsible Lending who predicts that
housing prices over the next five years will
fall and cause exit strategies to shut down.
The housing boom is fading. The
disconnection between incomes and high real
estate prices is evident; there is an
increase in the number of Californians
struggling to hold onto their homes.
A majority of the loans that have gone into
default originated between January 2005 and
February 2006. The median age of the loan
was fifteen months.
Homeowners were a median five months behind
on their primary mortgage payments when the
Lender initiated the Default process.
On Lines of Credit, the Homeowners were
behind a median of six months.
On a loan-by-loan basis, mortgages are least
likely to go into default in the Bay Area,
but more likely to go into default in the
Central Valley and Inland Empire areas of
California.
There are 7.87 million properties in
California, when one home forecloses the
surrounding properties lose value, as well.
By threatening the stability of the
neighborhood, foreclosures hurt everyone.
Homeowners work hard to provide the economic
security and ownership benefits to their
families what changes can be made in this
great country of ours so that owning a home
is fair, affordable, and sustainable?
Have an opinion or a question you would like
me to answer, then write me!
http://www.CarlHampton.com
“Your” Money Matters By Carl Hampton
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