The Sacramento Bee, highlighted a family who lost their home recently to an adjustable rate mortgage. This is common place with many home owners today all over the country and especially here in and around Sacramento County. Sacramento County ranks 7th in the Nation for Foreclosures.
Many of the adjustable rates are resetting to 7, 8 and 9 percent interest. Hello....something needs to be done, here!
As an example, a family whose house payment was $950 per month, now struggles with a payment of $3,307. With an monthly income of $2,200...there's no way!
Makes you wonder why a Lender couldn't figure that out when throwing dumping these adjustable loans all over the place, doesn't it?
The unfortunate part is that many families were under the mistaken idea that they could "trust" the Lender.
With the median income level of $57,000 and 80% of the home buyers last year earning less, families are struggling.
Last year, over 67,000 home owners in Sacramento were spending more than half of their income on mortgage payments, property taxes and insurance.
Lenders issued 18,000 default notices from January 2005 through July 2006 which leaves 49,000 home owners still in trouble.
More foreclosures are coming unless, something is done. This will and is having a powerful effect not only on those homeowners that are losing their homes but every single solitary home owner. Real Estate effects all segments of our economy either positively or negatively.
To read further, feel free to visit Sacramento Real Estate Voice.
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Gena - I think as time goes on we are going to find more and more foreclosures all over the USA. It is a shame how some of the lenders pushed loans through knowing that some of the buyers could not even make their first payment.
Chuck, unfortunately I think you're right. I know we are in for a slew in CA over the next year. Apparently, it is also happening in Europe as well...unfortunately, the same kind of loans.
Gena~ Yes, it is getting bad all over..its kinda scaring me. Lincoln has dropped big time:(
Multiple foreclosures confirm hard times for many, but there is always a balance. For every action, there is a reaction. While many are having really rough times, many others are getting richer and richer taking advantage of the misfortunate ones. It will all work out in the end... Meanwhile, I have a very expensive property to show to those fortunate ones. It's an unfinished penthouse of 9000 square feet in the most extraordinary location in Florida... I need to reach some of those very, very wealthy folks.
Laura, yes it has but so have a lot of areas. The key is to stay put, as you well know. This is a great lesson for those that love to take money out of their home and use it as an ATM machine...those days are over!
Robert, how true. The rich will get richer during this period in Real Estate by buying property at a significantly lower price.
ARMs are such a bad idea. People were not supposed to get them as their long time loan. Of course, many flippers got them as well, thinking that the house would be sold before the interest rate went out of control. North Las Vegas has been on a top ten list of foreclosure cities as well. -Charles
Charles, it seems most of the county has a ton of foeclosures. I do hope that new law is passed in the Senate and signed by the President so that we don't add insult to injury.