LAT: Mortgage Defaults Expected to Grow

[DeepModem Mom]

Mortgage Defaults Expected to Grow
With home-price rises slowing, many Californians behind on payments won't be able to avoid foreclosure, a research firm says.

By Annette Haddad, Times Staff Writer


In another sign that California's real estate boom may be peaking, the state's foreclosure activity has bottomed and is expected to rise, new data suggest.

After declining for nine straight years, the number of default notices sent to delinquent homeowners continued to level off during the second quarter, real estate research firm DataQuick Information Systems said Friday....

***

Some foreclosure activity is expected even in the hottest real estate markets, (John Karevoll, DataQuick's chief analyst) said. But over the last 18 months, the level has been "unnaturally low."

That's because rising home prices allowed distressed homeowners who couldn't meet their mortgage payments to sell their properties without taking a loss. As the rate of appreciation continues to slow, more homeowners won't be able to get out from under their debt before their lender forecloses on them, Karevoll said....

***

Historically, only about 10% of homeowners who receive a default notice actually lose their homes to foreclosure. But with wider use of higher-risk mortgages, such as "interest-only" loans, analysts expect foreclosure rates to creep higher.


http://www.latimes.com/business/la-fi-foreclose13aug13,0,1042864.story?coll=la-home-business

[mom cat]

1. And don't forget the new bankruptsy laws..A planned perfect storm!

[cliss]

4. Yes, good point.

What are the implications with this new bankruptcy bill? What happens if you lose your job and can't make the mortgage payment. I'm assuming the bank is going to take away your house, but are they going to make you PAY for it anyway? Sheesh.

I've actually read that they're planning to open Debtor's Prisons, like inthe 1800's. Don't pay your bills? Go to jail.

[Boomer]

6. Go to jail? Or enter the military

I predict a new "incentive" soon -- forgiveness of debt in exchange for donning an Army uniform....

[FloridaPat]

7. Federal prision? Not a bad deal. Learn a new trade. Get healthy

food. Lots of exercise. I could learn golf. How long does one stay in jail? Until the bills are paid?

[Voltaire99]

12. ...get raped.

The length of your term may be measured in more than days.

[FreakinDJ]

11. Thier plan all along

[VegasWolf]

2. Have your cash ready! Lot's of homes to get on the cheap. Wait till

the wave reaches full crest though!

[wakeme2008]

3. A lot of Flipper will be out of luck

An article in the Tampa Tribune talked about a number of the flippers and all had a hand full of houses up in the air and no money to pay the interest only loans they had on them.

[AndyTiedye]

5. Won't the Flippers be Doing it Through a Corporation?

Corporations can still declare bankruptcy and walk away from their debts.
It's just individuals that can't do that anymore.

[Gronk Groks]

10. (1) The trouble is the domino effect...

...if flippers can't sell the houses or pay the mortgages, they get repo'ed.

(2) The banks then try to resell them and that pushes the sales prices for all houses down. If ther are only a few no problem, the market will absorb them. If it is thousands, current housing prices decrease which affects everyones ability to refinance.

(3) Refinancing is the major way people are absorbing ever larger debt loads in today's consumer driven economy. This decreases consumer spending which is the principle driving force in the new economy.

(4) Recession looms.

(5) Alan Greenspan is no dummy. That is why he has been raising the interest rate every time he has the chance, to put some bullets back into his interest rate revolver. Does he have enough when it crashes??? Only time will tell...

[Luna_Chick]

8. I work for a title insurance company and..

was just talking about this very thing with a co-worker the other day. We're seeing more and more people taking out 2,3 or more mortgages out on their properties, with foreclosures even on the rise here in Arizona.

[annabanana]

9. Hooo--EEE this is gonna hurt..

(but what will the banks do with all those empty white elephant houses?)

[lovuian]

13. Calif. real estate boom may be receding

http://feeds.bignewsnetwork.com/?sid=b97764c55b405051

Big News Network.com Saturday 13th August, 2005 (UPI)

Mortgage foreclosures appear poised to rise in California.

The Los Angeles Times reports a real estate research company, DataQuick Information Systems, said that would be a sign that the real estate boom is receding.

DataQuick said that after going down for nine years, the number of default notices in the state leveled off.

more...

Nothing totally definitive just a maybe!!!

[nadinbrzezinski]

14. and as goes california goes the nation

[lovuian]

15. I agree the New Bankruptcy law is poised for this and

the credit card changes being enacted!!! Its a matter of time plus add gas & oil prices!!!

[JDPriestly]

16. Thank God for California's deficiency laws.

If you have a trust deed and the bank forecloses on your single family home, you don't normally have to pay the bank the remaining part of the mortgage. You don't keep your house, but you can walk away normally. This is not legal advice. It depends on the facts, so check with a lawyer about your situation before you walk away from your house. If you can afford nothing else, check with a lawyer before you walk away from your house. A lawyer may be able to help you make a deal with your bank and can, at least, adise you on your risks and rights.