'Run Out of Time'

From USA Today (via Builder Online) (hat tip: HBB):

Lupe Arroyo and her husband, Richard, for example, just took their Sacramento home off the market. Having tried to sell it since April, they cut their $369,000 asking price three times, to $329,500. "This last reduction was well below market value," Arroyo, 36, says. "It was a giveaway (price), and we still had a low-ball offer. We've frankly run out of time. We were planning to move to a different area, and we wanted to get our daughter enrolled in a new school. Now, it's one month before school starts."

Their agent, Tracey Saizan, says five of her clients have taken their homes off the market in the past few days. "I've had heart-to-heart talks with sellers who refuse to keep reducing prices."

From the Tracy Press:

Neighbors are finding it difficult to tolerate the condition of the house on the corner of Kavanagh Avenue and Lincoln Boulevard. It’s a typical suburban dwelling, a home just like theirs. But the house at 2901 Lincoln Blvd., is in foreclosure and abandoned. The front yard has chest-high weeds in place of a lawn, the side gate and garage door are wide open, and cigarette butts are strewn across the driveway. It appears to be a sitting duck for vandals and squatters.
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The Lincoln Avenue property is hardly the only one in such shape. More than 10 percent of homes on the market in Tracy are being taken over by banks in foreclosure proceedings, local real estate agent Brian Barringer said. That’s 104 homes citywide, many of them abandoned or neglected....

Tracy residents have been filing a record number of complaints about the unkempt yards, stagnant pools and attempted burglaries associated with foreclosed homes, according to city code enforcement officer Jim Decker. “We have had a lot of complaints about foreclosed homes,” said Decker, “and we’ve had a marked increase of calls in the last 2½ months.” Decker said complaints haven’t come from one neighborhood in particular, but from areas both rich and poor throughout the city. “There’s really no concentration of these abandoned homes. They’re just sporadic locations,” he said. “These are vacant homes people have just abandoned.”

But real estate professionals are quick to point to the root of the problem — bad loans.

From the Stockton Record:

He is a successful business man, owner of a restaurant, a home and some rental property with decent credit. You wouldn't think Efrain Flores, 47, was struggling with mortgage payments.

He wasn't, until a few months ago, after walking into a subprime lender office to refinance his home. Flores walked out with an adjustable interest loan, 5.5 percent more than his original loan. Flores, a Spanish-speaker, signed something he didn't understand.
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The refinance was supposed to trim Flores' monthly payment, but instead it nearly doubled from his original monthly mortgage by $1,000. And now, his equity line is dissolved. "I've worked hard to be someone and now I feel the bank is robbing me"...he said.
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"By far, the ones that got mixed up with the piggy back loans to finance 100 percent of the property are most at risk," said Richard Pittman, housing services coordinator with ByDesign Solutions, a credit counseling organization based in Los Angeles. Often, by the time homeowners seek help, 60 percent of them find out it's too late to save their homes, said Pittman. "They have to pick up the phone before the damage starts, as soon as they realize the adjustment is coming up," Pittman said.