Foreclosure auctions in California

According to reliable online sources dealing in details about distressed properties, a total number of 9,477 properties were put up for foreclosure auction sales in California last August. This was a record jump of 10.4% since July this year. The total valuation of the properties amounted to $3.86 billion. This is inclusive of $1.71 billion of 4,199 properties that was not occupied by the owners. Statistics showed that 44.3% of the units had been bought as investments. This is a vital point to bear in mind while analyzing the fall out in the real estate market and linking cause with effect.

Numbers never lie. Differences arise while analyzing the meaning of the statistics and to the way it points. That foreclosures have reached jumbo proportions is an undeniable fact. Most of the trouble is emanating from the sub-prime zone. The sub-prime market with floating interest was specifically created to cater to the weaker section of society to realize their dreams.

The objectives of the sub-prime mortgage plans were laudable but things went sour. The lenders resorted to predatory lending and used teaser rates to lure in borrowers into loans they could not digest. The lenders became greedy and without thinking about tomorrow walked into houses they knew they could not afford. Incomes were not checked. Property valuation was falsely raised and terms of the loans were kept vague and unclear. In most cases down payment was either waived or was negligible and the initial monthly dues included only the interest. Within two years or so the borrower bared fangs. Monthly dues more than doubled. Borrowers buckled under, sold off and left bag and baggage.

Foreclosures are concentrated in areas suffering from economic slump and where investors had free play. The minorities and elderly are worst hit. The municipal bodies are unable to cope with overgrown gardens and unsafe stinking swimming pools. To make matters worse the local bodies are not being able to collect taxes with the ownership issue of foreclosed units being in a state of limbo.

The game is not confined to the tug of war between borrowers and lenders. A price fall affected the entire locality. Abandoned houses led to surges in crime. The figures were so alarming that it sent shivers down Wall Street. International stocks began to shake. Mortgage companies started to down shutters with a massive money crunch. The government has begun to sit up.

Related Posts

• Strident Call For Halting Foreclosures From Lake County Council
• The FHA as a Saviour for Foreclosure Problems
• Shock Treatment Like Foreclosure Crisis Often Purges The Economy of Toxins
• Wall Street Brand Of Socialism In The Midst Of Foreclosure Crisis
• Foreclosure Crisis Will Worsen Before It Improves in San Diego