Foreclosure Picture To Become More Cloudy In Bay Area Next Year

October 25th, 2007 | Tags: Foreclosure

As many as 4,800 sub-prime loans are ready to foreclose in 2008. The loans had been made in 2006. It will cost borrows, cities and also the lenders nearly $1.5 billion. The statistics are spreading panic and lenders are being requested to modify the loans and somewhat make up for the predatory tactics that they have hitherto pursued. The worst affected are those on and below the middle income line. The foreclosure numbers are worse in Contra Costa County and Oakland.

Trying to find a solution a news conference was held in tandem with local officials and members of community organizations (ACORN). The supervisor of San Francisco Tom Ammiano brought in a resolution, (which was not binding) appealing to the 25 largest <a href=”http://www.foreclosurerepos.com/sub-prime-lenders.php”><strong>sub-prime lenders</strong></a> of the country to suspend for three months all motions on foreclosures for owner occupied houses in San Francisco. In the resolution federal regulators were also asked to waive pre-payment penalties and to stop effectively lenders from granting loans to those who will not be able to cope with it after being reset. Within few weeks the resolution is expected to be presented before the board of supervisors.

Some were of the opinion that merely educating people and making them aware of financial regularities is not sufficient to tackle the problem. Something more concrete has to be done. San Francisco assessor Phil Ting has witnessed a three-fold rise in foreclosures within the span of little more than a year. The findings of Acorn are not comprehensive, as they have taken into account only those sub-prime mortgages loans taken out in 2006.

The Acorn research director Wolff says that in 2009 those loans taken in 2005 and 2006 will reset and cause foreclosure numbers to skyrocket. What is seen today is just the beginning of the race. According to her figures, 617 houses in San Francisco and Santa Mateo Counties were sub-prime – meaning high cost loans. These were made in 2006. The total value of these units for all concerned – borrowers, lenders and investors as well as local administration amounts to $210 million.

The figures are made on the assumption that a good majority of the foreclosed houses will become vacant, attract crime, shoot up police expenses and deprive the state coffers of taxes. The entire neighbourhood will be attracted – not only those that are foreclosed.

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