California Foreclosures Surge
Among the top losers after the first quarter of 2007 results are in is California. The sunny state posted 31,434 foreclosure filings for March, 23,200 for February and 25,961 for January. Compared to the first quarter of 2006, California foreclosure homes rate has already increased by a whopping 172.86 percent. This brings the total of California foreclosure listings to date at 80,595.
Real estate experts speculate that house values may be affected if the California foreclosures rate continues to rise. Majority of these homes were usually purchased by owners under a subprime mortgage loan agreement. “Subprime” loans are loans taken out by borrowers with bad or poor credit. These loans were offered with higher than regular interest rates and came with an adjustable interest rate.
Since these owners can not afford their homes in the first place, they have difficulties making the mortgage payments. To make matters worse, interest rates have risen dramatically as well as the cost of living. Most of these owners end up facing foreclosure.
Local officials have started exploring ways to slow down the surge in California foreclosures and also make sure that it would not happen again. They are educating owners facing foreclosure to negotiate with their lenders or consider selling their homes through the assistance of experienced real estate brokers like MostlyForeclosures.com.
Aside from these, new laws are being approved for the tightening of loan approval policies. These laws require lenders to explain in detail the loans they are offering to qualified borrowers. The foreclosure situation has also brought into focus the subprime loan industry. National and local officials are looking into the industry and identifying the practices which possibly lead to the current foreclosure situation.
On the other hand, you can not blame buyers and investors who see the situation as a goldmine of opportunities.
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