San Diego Foreclosures about to Skyrocket!

For millions of homeowners, the cost of home ownership is suddenly spiking because they hold adjustable-rate loans. A report released Tuesday warns many may be unable to afford the increase.

 
When interest rates hit historic lows in 2003 and 2004, consumers seized the chance to buy or refinance. Many pushed payments even lower by signing up for introductory rates that lasted two or three years. Plus, many selected interest only 100% loans for new home purchases. The industry touted such loans as a way to borrow more money than customers could otherwise afford.

 But the loans were simply agreements to pay less now and more later. In many cases, later is now here. The loans are adjusting for the first time. The Mortgage Bankers Association estimates $300 billion in mortgage loans will move to a higher rate this year, and an additional $1 trillion will rise for the first time in 2007.

 Homeowners who can’t afford the new payments will have to sell, or face foreclosure. Amid cooling demand for homes, and the back to back drop in home values in San Diego real estate, plus higher interest rates, experts fear foreclosure increasingly will be the only choice for most.
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