Welcome to the tip of the iceberg of a monumental financial meltdown - those interest-only, no-down, no-doc, teaser-rate junk home loans are coming home to roost.
The rate at which borrowers are foreclosing on their mortgages has doubled since last year, as high-risk financing has become the norm for home buyers in San Diego County. Local experts wonder whether the recent spike in foreclosures is a harbinger of horrors to come or of the much-hyped "soft landing" for the local real estate market.
In the month of January 2005 there were 374 mortgage defaults -- that's when a borrower hasn't kept up their payments and a lender has the option to start the foreclosure process. In January of this year, that number rose to 536, according to County Records Service, a firm that tracks foreclosures in the county.
Perhaps even more indicative of the state of the housing market, in January 2005 no properties were seized by lenders through the foreclosure process in San Diego County. Every one of the homeowners who had defaulted on their loans managed to offload their property without the bank closing in on them. But last month, lenders seized 66 properties through foreclosure processes. That's almost as many as in the whole of 2005.
In 2005, more than 70 percent of home loans in the county were interest-only or negative-amortization loans, according to Loan Performance LLC
May 10, 2006
Foreclosures in Detroit - sure. Foreclosures in Gary, Indiana - makes sense. Foreclosures in San Diego? Wow.
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13 comments:
what's going to happen on 06/06/06 ? anyone know?
If you bought a home you couldn't afford, you probably KNEW you couldn't afford it. Its not rocket science to figure how much your payments, taxes, utilities, etc will cost each month compared to your salary. You shouldn't have let your mortgage broker talk you into it or let him lie about your income or let all your brothers and sisters co-sign for you.
There's soooo much fraud. I can't believe there's guys on the secondary market that want ANY of it, even the Fannie-Freddie stuff. There's more funny income documentation than they want to admit. And chances are everyone's in on it - the customer, the broker, the lender. Its too easy, too tempting, especially for all the new guys that jumped on the bandwagon. All you need is a good quality scanner and an overworked, underpaid underwriter on YOUR payroll.
Yes its going to get ugly:(
Wait for the 2005 3/1 ARMs and the 2003 5/1 ARMs to adjust in 2008. That's the year to survive.
The only thing happening on 6/6/6 is the opening of The Omen remake. Although I'm sure there will be foreclosures that day too.
I don't believe that many buyers realize they can't afford homes they buy. The realtors do lie, lie, lie. And also, just don't tell buyers things they should. I know of a young couple about 22, with a small child. They bought a KB home in Alb. The woman had to start working two job. This combined with her husband's two jobs, just to pay the taxes and maintance upkeep, landscaping ect. They bought the house at a low price, but without a good education, and good jobs, the bills were piling up. I don't know what happened to them. But they didn't realize the bills they would have. When people go to buy houses, they are only told the payment on the home loan, not really what it will be when insurance and PMI ect get rolled in. People only find this out when they're halfway through the deal. I have seen this happen many times.
Aooga, Aooga, Dive real estate, Dive. LMAO!!!!!!!!
what's going to happen on 06/06/06 ? anyone know?
I'll be 42 + 1 day old
what's going to happen on 06/06/06 ? anyone know?
That!! the day I SATAN!! will rule the world and create ARMAGEDDON AND BIRD FLU THROUGHOUT THE WORLD MUHAHAHAH! MUHAHAHAH!
opps! dropped my bong :)
I'm sure you all know, but i'll mention it anyway. The word Mortgage is derived from french. Literally, it means "death pledge". something to ponder over the next two years.
Yee who signed the "death pleage" at the peak of the bubble using the magic words "INTEREST ONLY" and/or "ARM" sold their soul to the devil.
The date that Hell shall begin mass collection of these souls to be tortured with a lifetime of indentured servitude shall be "6-6-6"
on 6-6-6 the anti-Christ will be born.
I say briefly: Best! Useful information. Good job guys.
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