There has been a 14 % plunge in foreclosure activity
There was little time is considerably low foreclosures in California . This had infused hope amongst the experts that the housing market in the state could be on the recovery track. There was a 14 % plunge in foreclosure related activity. In contrast, there was a 2 % increase in foreclosures nationwide. Experts had said that the housing market of California was the first to crumble and now the first to recover as well. Prices had crashed in ’09, but now they are gradually increasing.
The housing market is improving. The trend is not very dramatic. This was revealed by Kenneth Rosen, a Haas School of Business professor. However, the unemployment rate of the state is still high at 12.4 per cent. Even the demand for housing is still very weak. However, there will be trouble soon. Many mortgages that are of adjustable rate will be reset and that too, at higher rates in the future. This was revealed by Rick Sharga, a senior official of RealtyTrac. If borrowers are unable to make the escalated payments, foreclosures would increase again.
Sharga said, “You have the three-headed monster of high unemployment, a weak economy and problem loans.” He said that foreclosures would surpass that of last year and even that of ’09, which was considered to be the peak year. Take for instance, Guy Vernikovsky. There has been a foreclosure filing on his Torrance home. He has tried to adjust his loans many times and has applied for low interest rates.
Thirty two year old Vernikovsky said he is currently without a job. However, he tried his level best to be current on two mortgages. Subsequently, he has buried himself in debt of credit card. However, now he has moved with parents and has got himself a new job. He said that he would now be able to make the loan payment if banks reduce his loan interest rates. Vernikovsky said, “I applied two or three different times and they would not modify my loans. I wasn’t looking to turn a fast buck on a real estate market that was hot at the time. I was really looking to own that home for the next 20 to 30 years.”
It may be pointed out here that above a million homes in California are facing some kind of foreclosure activity. This includes bank takeovers and default notices. Of these filings, 173,175 properties have been reclaimed by banks once again.
