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California Mortgage Defaults Poised to RiseForeclosureS.com: California Mortgage Defaults Poised to Rise SACRAMENTO, Calif.--(BUSINESS WIRE)--Sept. 19, 2005--Northern California-based ForeclosureS.com, an investment advisory firm specializing in distressed property, reported today the shift from a seller's market to a buyer's market could lead to an increase in mortgage defaults in the last quarter of 2005 and continue into 2006. Alexis McGee, president of ForeclosureS.com, said that the steady decline in foreclosure activity in California had leveled out, and a combination of slowly rising interest rates and a shift to a buyer's market would make it harder for distressed homeowners to refinance or sell their way out of trouble. "Foreclosure activity in California is no longer declining," Ms. McGee said. "And this activity is now actually below historic baselines in several markets. The default rate has nowhere to go but up." She pointed to a growing softness in the major metro markets as signs that the hot California market was finally peaking. "According to Trendgraphix Inc, the Sacramento metro area saw 2318 price reductions in May of this year. In July, we saw 4100. August, at mid month, was on track for 4500. That's a cooling market." Ms. McGee went on to say that the first signs of weakness occur in the high end and "move up" end of the market. "Contrary to some claims in the media that the sky is falling," said Ms. McGee, "we see a plateau forming with modest price corrections in overheated markets. Real income growth has to catch up and restore lost affordability." She added that a period of increased defaults was on the horizon partly because of the use of exotic loan programs, such as interest only loans and so-called option ARMS (also known as negative amortization loans). "Many homebuyers," said Ms. McGee, "have misused these loans to buy homes they really can't afford." ForeclosureS.com has been publishing foreclosure lists, analyzing housing trends and assisting investors since 1992. The company currently serves six major markets across the U.S. "Our mission," said Ms. McGee, "has always been to assist investors in locating troubled homeowners in order to help these owners find ways to solve their problem, or to sell their way out of foreclosure before the auction. That way, they can conserve some equity for a new start, a much better choice than losing everything on the courthouse steps." Homepage Please support are sponsors. To design you custom retirement plan. http://www.retirement-plan.us For planing a IRA rollovers. http://www.ira-rollover.us Professional asset allocation and the wonders it can do. http://www.asset-allocation.us Professional money management: National ranked performance. http://www.roth-ira.us Managers selected to fit your needs. http://www.money-managers.us |
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