Foreclosures in Bay Area Create A Record

In the third quarter 3,242 Bay Area houses foreclosed marking 622% increase in comparison to the figures during the same time span in 2006. There are no signs of the weather clearing in the near future. Across the State, bank repossessions rose by 600% and the default notices were 2.7 times higher than the previous year. Default notices are also rising rapidly in the Bay Area.

Most of those in the foreclosure net come from the sub-prime mortgage sector. In 2005 California had been caught up in a housing boom frenzy where loans were given out easily without checking on the viability of it. Lenders were motivated by commission rake-ins and speculation.

The interior regions of California are worst hit stretching from Bakersfield to Sacramento. About half is concentrated in 293 of the 1,465 zip codes. These pockets had seen a rise in real estate prices of 34% during the first months of 2005.

Since then it has fallen by 11.7%. The counties most likely to run into defaulting loans are Merced, San Joaquin and Riverside. San Francisco, Marin and San Mateo most probably will not have high default numbers. Lenders are most active repossessing units in Contra Costa County. Here 1,159 house owners had lost their houses. Next in number is Alameda County with 674 and Solana with 495.

The foreclosure crisis has reached jumbo proportions. But nothing legally can be done to book the past offenders. New laws are being considered so as to block the path of a repeat performance. However there are still many options and the borrower should seek proper counseling and advice to survive this bad spell.

The first thing to do is to directly contact the lender – usually the bank that had spelt out the deal. Lenders too want this move so that things can be thrashed out amicably. There are options of modification of loans so as not to allow high reset or forbearance schemes where the loan is kept temporarily on hold allowing the borrower a breather. Community groups can be contacted to mediate between the borrower and the lender. There many non-profit organizations that are proactive in this matter and come upwith concrete solutions. They have their websites and hotlines. The government too has opened its own website regarding help and the IRS has opened another to answer queries about taxation.

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