"The Days of Instant Equity are Over"
From the Bakersfield Californian:
Record-shattering house prices have helped send national foreclosure numbers plunging well below historical norms in recent years. But the days of instant equity are over. The real estate market's torrid pace has slackened. Interest rates are on the rise. Introductory rates for exotic loans are ending. And tens of thousands of homeowners are starting to miss mortgage payments.
About 530 Kern County properties entered some stage of foreclosure during the first three months of 2006, according to a recent report from RealtyTrac, an online marketplace for foreclosure properties. That's a 15 percent jump from the same period last year. California as a whole saw an 86 percent spike during that same time with more than 29,500 properties entering some state of foreclosure in the first quarter of 2006. Nationally, foreclosures were up 54 percent, according to the study...
In 2004, 58 percent of Bakersfield home buyers took out adjustable-rate mortgages and roughly 20 percent opted for interest-only loans, according to a study by Credit Suisse First Boston. Some have also been spending 50 percent and more of their monthly incomes on mortgages, far above federal recommendations...
It's a national problem that's of particular concern in hot markets like California, said Allen Fishbein director of housing and credit policy for the Consumer Federation of America. Leveling prices and rising interest rates mean homeowners can't refinance as easily if they get into trouble, Fishbein said. Some people are refinancing with new adjustable rate loans that end up costing them even more in the long run, said mortgage banking attorney Alan Wolf. "We have some dynamics here that are pretty scary," Wolf said.
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From a related article:
Many people blame themselves and don't realize there are millions of Americans who are in default at any given time, he said.
Lenders have entire departments dedicated to helping homeowners.
"In many cases, it's not their fault at all," Wolf said. "It's market conditions."
they should blame themselves.i have been conned a time or two myself,by pros...and there was no one but myself.i lived,and learned."too good to be true" means too good to be true.
I'm very surprised that the Bakersfield Californian published this type of story all. There a tight lipped bunch when it comes to the real estate downfall. I guess the run but can't hide theory is true.
Oops type-o: at all
The pros were very serious about doing the conning in this case. I was referred to a financial advisor with various certifications who pulled out numbers to "prove" that housing prices in California NEVER decline and who promoted exotic loans as a way to get into the market before it was too late.
Did I believe her? No. But finding the facts to disprove her claims was quite difficult in spring 2005 (and I'm a professional in research) -- it has become much easier, now that things are HAPPENING for the mass media to cover.
And I got called paranoid, stupid, and neurotic by the MBA who sent me to her. Never mind that I was right. What would someone with less training, more trust in "experts," and little curiosity have done?
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