Foreclosures are up again
California foreclosures are at the highest since 1997- up 800% since last year. The state reported 5,705 foreclosure filings during the month of June, a foreclosure rate of one foreclosure filing for every 317 households â€” still more than twice the national average.
LA County Records show over 200 foreclosures A DAY!
Because of loose credit, risky lending practices, fraudulent appraisals, and Wall Street greed, borrowers were able to combine a number of features; 100% financing and no-doc loans to buy property for investment or to live in that is way beyond their means. Then they used these houses like ATM machines sucking out every bit of equity.
The rise of these liar loans combined with other factors such as higher debt levels and changed bankruptcy laws, are causing foreclosures to rise dramatically.
In addition, 27 subprime lenders have gone out of business in the last few months. Credit is tightening like a vise in ALL sections of lending- even for A borrowers.
There are $800 BILLION of adjustable rate mortgages that have just started to adjust and are putting thousands of home owners at risk for losing their properties because they canâ€™t afford the higher payments. Add in stiff pre-payment penalties and you have the recipe for disaster.