Can't Pay, Can't Sell
From the Stockton Record:
Second-quarter foreclosure activity in San Joaquin County took a year-to-year jump because the slower housing market made it tougher for homeowners in financial trouble to pay off their mortgages via home sales. In a report released Wednesday, La Jolla-based DataQuick Information Systems said that in San Joaquin County, the number of foreclosure notices was up almost 90 percent from a year ago, rising from 318 in the second quarter of 2005 to 604 in this year's last quarter...
Ron Cutler, broker-owner of Suntec Financial, Stockton, said he believes there's a nationwide problem developing with foreclosures resulting from questionable mortgage loan deals that allowed people to buy in a pricey housing market. Some mortgage brokers and lenders put people into adjustable-rate mortgage loans with introductory payments as low as a 1.25 percent interest rate the first two years, he said.
When those ARMS kicked in with current higher interest rates that often doubled the house payment, many of those home buyers found themselves going into mortgage default, he said. Plus, some new homeowners ran up additional debt for window coverings, furniture, landscaping and so on, Cutler said.
"It's evident those people were getting into homes that they basically shouldn't have qualified for," he said. "Now the market is starting to change. They're trying to sell their house, and that's not happening either when you have a large amount of houses on the market."
3 comments:
Thank you Alan Greenspan for allowing the masses to acquire the American Dream if only for a brief moment. If you listen to the Realtor establishment, you still be a buyer in this market but if you do a gut check you'll sit on your hands for a couple of years. Anything going straight up for nearly 5 years has to come straight down when dream becomes reality. These poor people got sucked in and they will take an entire industry down the tubes with them. I just hope the economy doesn't tank with housing. I fear it will. Housing is become a huge component of job creation and overall GDP just like Tech was during the late 90's. This does not bode well for '07 and beyond.
Somebody should track the ever increasing ratio of ALL CAPS ads to no caps ads on craigslist. I'm not sure why they think that is going to help.
So sad.
Let's make sure we blame the home buyers for 100% of the problems in the real estate buisness, so speculators, RE agents, and mortgage loan officers can have another boom (bubble) in say 10 to 15 years from now.
Buyer talks to Joe "the snake" mortgage guy in March 2005:
"you mean...we can qualify for a $500,000 mortgage even if we only make $60,000 annual income? That doesn't seem right, but I better get in now or I'll miss the boat like my realtor says."
Buyer talking to Shell Game Real Estate Brokers one year later -- "Wait, what do you mean John Smith no longer works for you...I need to talk to him about this 'promised' appreciation that never happened. I needed that appreciation to offset the annual payment for the mortgage. I can't pay this insanely high mortgage payment with my annual income, and with no appreciation I can't sell my home either! I'm going to loose the little equity I put into this property if this market goes down any further!! What am I going to do? Where are you guys now?"
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