Foreclosures Batter Sacramento

September 3rd, 2008 | Tags: Foreclosures

Data is flooding in to show that Sacramento continues to be battered by foreclosures as the crisis swirls through an agonizing summer of woes. In Sacramento, El Dorado and Placer the foreclosure rate is 1:145. In July 5,249 houses had been foreclosed upon according to ReatlyTrac. In the country Sacramento has been ranked 11th with the worst foreclosure numbers.

In July, foreclosure numbers increased by 55% across USA in comparison to July 2007. The trend continues without a pause. In the forthcoming months a bunch of sub-prime mortgages will increase its rates and in all probability this will trigger off another flood of foreclosures. Foreclosures combined with a slumping economy are wrecking the lives of many.

Leovardo Lopez, resident of Sacramento is a pool builder. He is one of the many trapped in this foreclosure crisis. He is under great stress with his work hours being slashed. However Lopez is luckier than his co-workers who have been retrenched. Leovardo is afraid that with his scaled down earnings he will not have enough to meet mortgage payments from the next month. To make matters worse, the present value of his house is worth $150,000 less than what he paid for in 2005.

Lopez is 42 years old, married and with two children. He participated in one of the numerous foreclosure workshops being held across Sacramento. This particular one was under the aegis of ACORN – a federally backed non-profit body for helping struggling house owners. The credit ratings of Lopez are good and he is backed by 16 years of blemish free work record with the pool company. Speaking in Spanish he said, “I became a citizen to fulfill the American dream. After all I’ve sacrificed it wouldn’t be fair to walk away from my house.”

Lopez has at least consulted the help agency before foreclosure knocks. Many others are not doing so and courting extra trouble. ACORN will try to talk to Lopez’s lenders to refinance the loan.

Meanwhile good news has come through. Shortly the federal authorities will start on its innovative programme of Hope for Homeowners. $300 billion has been allotted for refinancing mortgages so that they can move out of risky contracts to long-term mortgages with reasonable interest rates. The government is optimistic that 400,000 borrowers facing foreclosures will benefit from this measure.

However there are certain preconditions attached to the benefits and is not for everybody said Ed Corona of NeighborWorks Home Ownership of Sacramento.