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L.A. Land : Los Angeles Times : California foreclosure "surge": Up 327% from '07 levels (http://latimesblogs.latimes.com/laland/2008/04/california-fo-1.html - broken link)
Quote:
From DataQuick's report on California foreclosures in the first three months of 2008: "Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 47,171 during the first quarter. ... Last quarter's total rose 48.9 percent from 31,676 in the previous quarter, and jumped 327.6 percent from 11,032 in first quarter 2007." That translates into 517 foreclosures every day in the first quarter of 2008.
Outside of the entire ARM and creative type financing schemes that have led to the recent housing debacle, I have to wonder just how much of this is also a readjustment of housing values.
I realize California is rather unique and a very desirable place to live for many, but it is also a massive state with a fair amount of space. When I look at housing cost around the country, California and especially places like the San Diego, LA, and San Fran areas have housing cost that are through the roof. In my opinion they were way over priced to start with. So in the article, falling housing prices are pointed at as one of the sources of blame, so I wonder how much of this just isn't the housing prices resetting to something more along the lines of reasonable, if anything about California can be reasonable.
That's not the half of it. There were over 8,000 mortgage defaults during the first quarter of 2008 which will mean record foreclosures in the months ahead.
Depends upon the area out here. The suburbs and newer areas such as the Inland Empire and Placer County are seeing quite a few, but the most expensive and established areas, such as Santa Monica, Venice, Santa Barbara, San Francisco and Marin County are actually holding steady in price with very few foreclosures.
Generally speaking, the only homes on the market now are those who either need to move or "investors" who were flipping homes, and were caught with multiple homes when the market went south. The current period is getting the adjustments from the last of the "junk" mortgages that were issued, so that process should pretty much have played itself out within the next six months.
As always in economics, you have time lags and amplification, so you probably won't see a statistical turn around for another year or so.
Stay tuned, and continue to dig into these foreclosure numbers to notice how many are actually "premeditated." A lot of the mortgages issued in the far suburbs of L.A. were based on fraudulent paperwork, no doubt. In those cases, the borrower cashed out as part of the mortgage deal and from the beginning intended to walk away from the loan. These are causing hand-wringing in the mortgage industry (they brought this on themselves by not building true 'visibility' into those loan instruments that were, in turn, marketed for sale to investors) but cannot be the basis of a diagnosis of economic calamity.
L.A. Land : Los Angeles Times : California foreclosure "surge": Up 327% from '07 levels (http://latimesblogs.latimes.com/laland/2008/04/california-fo-1.html - broken link)
Outside of the entire ARM and creative type financing schemes that have led to the recent housing debacle, I have to wonder just how much of this is also a readjustment of housing values.
I realize California is rather unique and a very desirable place to live for many, but it is also a massive state with a fair amount of space. When I look at housing cost around the country, California and especially places like the San Diego, LA, and San Fran areas have housing cost that are through the roof. In my opinion they were way over priced to start with. So in the article, falling housing prices are pointed at as one of the sources of blame, so I wonder how much of this just isn't the housing prices resetting to something more along the lines of reasonable, if anything about California can be reasonable.
That is what happens when banks give loans to everyone including illegal immgrants.
Two things set housing prices; the available money which amounts to 2.5 to 3 times the annual gross income of the buyer and the potential speculative gain for the short term investor. As the former is, in the aggregate, declining with the recession created job losses and the latter, with the collapse of the REIT values, has just about eliminated available speculative capital, I expect that California housing prices may adjust down to way below current and, in a lot of cases, below remaining mortgage values resulting in negative equity for the home owners and the banks.
The overall economic effect of this loss of apparent capital is yet to be determined.
That is what happens when banks give loans to everyone including illegal immgrants.
Oops, your racism is showing.
Banks lent money to people with no documentation required for salary confirmation.
People bought more house than they could afford.
There were unscrupulous lenders and unscrupulous buyers.
A persons status as a citizen didn't have much to do with this fiasco.
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