Posts Tagged ‘modesto’

Michigan ranked 6th in the country with 15,565 foreclosure in some stage of foreclosure or the other. It showed an 11% rise above July figures and a 126% high jump from the month of August in the previous year. The numbers tagged to Michigan are inclusive of 3,534 units that went into delinquency, 6,572 that received notices for trustee sale and 5,459 that had already been taken over by the bank.

In Wayne County the foreclosure versus household ratio is 1:87. It ranks 4th in the country. The highest is in Modesto, California with 1:79 during August. The five top rankers are Nevada, California, Florida, Georgia and Ohio.

What is causing grave anxiety is that these figures are just the tip of the iceberg. In the near future more foreclosure activity is expected when a sizable number of sub-prime mortgage loans will reset the interest rates.

The sub-prime debacle is a clear case of a dream that has turned into the reality of a nightmare. The scheme was launched to help those with weak credit to be able to avail of house loans and live under their own roof. But predatory lending on the part of lenders and greed on that of the borrowers made things go awry. After the honeymoon period of low monthly repayment plans when the rates began to adjust to higher figures the borrowers found it impossible to make ends meet. It most of the cases the rise was more than double. One by one the houses fell into foreclosure.
There are many factors behind the inability to pay increased rates. Firstly many had invested in housing units being sure that property prices could never fall.

Thus they expected a neat profit. But the opposite happened and there was not enough equity left to clear dues leave alone profits. Secondly initially the value of the houses had been inflated to expedite the process of a handsome loan. But with time the balloon burst and the real price showed up. Thirdly the income of the borrowers was not always correct and this led to the inevitable. Added to these was the usual cycle of death, disease and calamity of unemployment that might well overtake any family anytime. All these factors contributed to the landslide that is showing no signs of slowing down despite help from Washington.

Search Images