Wednesday, September 06, 2006

Placer Upside Down

From the Roseville Press Tribune:

The prospect of people losing their homes has increased in Placer County as mortgage default notices have more than doubled. According to the latest report issued by DataQuick Information Systems earlier this month, the amount of default notices in the county - the first step in the foreclosure process - for the second quarter has increased 126.2 percent compared to numbers from the same time last year. Placer County had the second largest percentage increase in the state behind Sutter, which had a jump of 229.4 percent...

"What I'm seeing from clients I had a year ago, and especially the people that bought homes with 100 percent financing, they're now upside down," said Tom Urbani, branch manager for Jim Leonard's Mortgage Connection in Auburn. "Those people who did 100 percent financing are seeing the home values drop anywhere from $10,000 to $30,000."

With home values dropping, those homeowners that have "aggressive" financing are not able to refinance because the value of their home is not high enough to make it profitable. "For some clients we've suggested that they sell their homes," said Mike Ferguson, owner of Windsor Fina-ncial Services in Granite Bay. "They're at their maximum debt ratio and the value is not going up so, unless they sell it, their credit is going to erode and they're going to be heading into a foreclosure situation down the road."

1 comment:

rocklin renter said...

According to reports, 43% of homebuyers in 2005 did so with 100% financed loans.

So....

43% have 100% financing...
77% have some form of adustable...
prices are on the decline...


[sarcasm]
Oh yeah, definitely a soft landing scenario playing out here.
[/sarcasm]