Foreclosure Stumblings In Yuba

Posted in Foreclosed Homes, Foreclosed Properties, Foreclosure Homes, Foreclosures, July 27th, 2007 |

Yuba County has the dubious distinction of leading in foreclosure trippings. During the second quarter of this year the fall out was four times more than during the same period last year, according to La Jolla based real estate services, DataQuick Information Systems.

The first step is issuing of default notices. This increased by 280% in this county. The number this year was 171 as against 45 in 2006. There had been an increase in 2006 in relation to 2005 but that had been negligible and not spectacular like this time. It was the highest number of notices in ten years. The causes were pinned down on rapid fall in prices and slow sales. The balloon of frenetic buying during 2004-2005 seems to have burst. Till now property owners had been able to survive because of real estate boom. They sold their homes and refinanced.

But of late the noose of foreclosure is tightening with few being able to slip out of it. Nearly more than half of property owners are in the red. 54.6% scramble out somehow by refinancing and getting some equity on their houses. A year ago this route had saved 88%.

DatQuick puts the blame on the slow market and homes bought with multiple loans financing method. In Yuba County the average prices of property fell by 10.4% in June 2007. A year ago it was 8.5%. Sacramento is the weakest spot in the region. Till last Tuesday there were rumours that the foreclosure crisis would make a u- turn but nothing happened. This is just the reverse of the coin when the atmosphere had been such that lenders came forward to give loans even to those who were not technically credit worthy.

Many questionable loans were made during summers of 2005 and 2006. The price of property was hopping and jumping up by double digits allowing lenders to tease borrowers on to stretch beyond their maximum financial capacity. It is the latter that is kicking off the storm.

The prediction is that there is little hope in sight. Foreclosures will keep on rising as a fall out from loans of 2006 that had 2 year fixed rate periods. The interest would be reset in 2008 at a higher notch – thus putting more pressure on monthly installments.
Coupled with this are unemployment problems making it impossible for owners to remain masters of the house.

Via