California Home Foreclosures at Record Highs
California home foreclosures
California foreclosure activity stayed at record highs in April, according to a report released today by RealtyTrac. The report showed California had the highest total for home foreclosures (96,560).
“Total foreclosure activity in April ended up slightly above the previous month, once again hitting a record-high level,” James Saccacio, CEO of RealtyTrac, said in a statement.
One should keep in mind that California has enacted two laws extending the foreclosure process. The standard foreclosure process in California was 90 days plus a 21 day advertising period. California’s first new law added approx. 30 days to this process. Then, just a few months ago, California passed a second law extending the home foreclosure by an additional 90 days. These two California laws combined, add four months to the standard foreclosure process.
It’s my personal opinion that these California laws extending the foreclosure process are in reality, also extending the length of the real estate malaise. The basic foreclosure process is a proven method of moving real estate from non-payment into strong hands.
No lender starts the foreclosure process after the first missed mortgage payment. Yes, the process usually starts after three/six months of missed payments. So, combine these facts with the new extended California foreclosure process and I would say the vast majority of homeowners in foreclosure are getting to live mortgage payment free, for over a year, in California.
Plus, and it’s a big plus, the California mortgage extensions are hurting home owners associations. Most homeowners in trouble with their mortgage payments are also not paying their homeowner monthly dues. In California many HOA monthly dues are $200 or more per month. Now with the additional four months added to the forclosure process, who is picking up the additional $800+ in lost monthly dues? The answer here is quite clear. These lost dues are being paid by the other homeowners in the association. If associations are currently depleating their reserves to cover these lost dues, at some point, the association will have to pass a special assesment or hike the dues for all homeowners. San Diego Real estate agents
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Everyone likes to talk about the foreclosures as if it’s a bad thing when the reality is that it’s an incredibly good thing. All the bad loans inflated the market well beyond what it should have been. As these people default on their bad loans the price of housing corrects, as it should, and maybe the rest of us get to buy. This story is good news and it should be reported as such. Or, would we all be better off if the government steps in and inflates pricing again.
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I think that in the long run, everything will probably be okay. The government will save us.
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Dummies should have made sure they could afford houses before buying them. Lenders should have been more analytical is choosing borrowers who really had the capacity to repay loans at whatever the maximum interest rate could be after any teaser rate ended. Fools–all of the players in this drama are fools.
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