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California is in the State of Foreclosure - Articles Surfing
California foreclosure listings have skyrocketed. Data reported as of March 2007 indicate that 1 out of 373 California households found itself in one state or the other of the foreclosure process. Many of these same households had obtained subprime or A-Alt loans to finance their property.
The fact of the matter is, it its very expensive to purchase California real estate. The higher the price, the more difficult it is to secure financing. In recent years, many lenders have offered A-Alt or subprime loans to people who would have otherwise not qualified to become a homeowner.
What is unfortunate is many recipients of this type of loan are defaulting. The default rate is occurring at an alarming rate. The lenders now find themselves on the receiving end and are getting these homes returned to them, often in disarray. Lending organizations are being forced to create completely new departments to handle the influx of paperwork and properties in order to document and attempt to find a new homeowner for the real estate.
Lenders do not want to be real estate agents. Simply, they do not want to service, rehab or sell the properties. Lenders do not make money in unoccupied homes with mortgage notes not being paid. To complicate matters further, the former homeowner may have left the property needing costly repairs. In order to attempt to resell the property, the lender now has to become or hire a general contractor, cleaning service and realtor in order to get the property prepared to a sellable condition.
If a particular area has many unoccupied homes, it tells any prospective buyer that the area is troubled. Unoccupied properties also are an invitation to squatters, loitering and looting. These unsavory practices decrease the value of the property as well as surrounding properties, making it difficult to not only sell, but to sell at a value close to the home's suggested worth.
Fortunately, several companies have stepped in to assist a possible refinancing with the troubled homeowner. Bank of America, Citibank and Wells Fargo have developed programs enabling note holders of subprime loans the opportunity to refinance the principal owed on the house to a price that will meet their budget. The California economy needs California foreclosure listings to decrease. Hopefully, real estate lending companies are learning from its mistakes.
Copyright © 1995 - Photius Coutsoukis (All Rights Reserved).
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