California Loans News

The independent real estate market forecast research company Housing Predictor found out that the continuous decline of housing prices may be beginning to ease. This impact may lead to improved real estate market conditions in some areas. However, there are still looming signals of other depreciating markets in some states.

According to online real estate marketplace Realty Trac, six states account for the most number of foreclosure notices. These are the most affected areas in the real estate crash. The territories are California, Florida, Arizona, Nevada, Idaho, Illinois and Michigan. About 74 percent of the markets in these areas have seen slower deflation or increases in home values. California, Nevada and Arizona have the highest number of foreclosures. California alone accounts for 27 percent of all notices of foreclosures during this year’s 3rd quarter.

Realty Trac’s report also exposed that estimated 938,000 properties were affected by the foreclosure crisis during the July-September quarter. In the previous quarter, there were only 890,000. “That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year,” the report said.

In addition, the Realty Trac report has revealed that there were almost 344,000 foreclosure-related filings that occurred last September. Although it was 4 percent lower than August, it was still the third month to have the highest number since early 2005. It was also the seventh consecutive month that such number of households to receive notice of foreclosure filing. This does not even include Notices of Defaults and other legal filings. Also, there were 88,000 homes repossessed by banks last month. It was another high increase from August’s 76,000.

These states were once heavily targeted by national lending agencies during the real estate boom, according to NuWire Investor. Hence, the massive numbers of foreclosures in these areas were due to the immense number of mortgage loans made during the real estate boom. The loans were either adjustable rate mortgages (ARMs) or other conventional loans.

A Housing Predictor survey found out that 32 percent of its respondents said “they would walk away from their mortgage if housing prices continue to decline.” This then paved the way for strategic foreclosures to boom. Almost 25 million properties are projected to enter such action, which could trigger the worst financial crisis of the country yet.

Such conditions led to the Obama administration’s formulation of housing assistance programs like the trial loan modifications. Subsequently, the administration has encouraged banks to reduce loan balances instead to enter the property into a short sale deal. Housing Predictor observes that “bankers are still excessively slow in responding to buyers offers to purchase property, awaiting additional government financial assistance.” Also, in light of the administration’s claim of more than 500,000 homeowners assisted with trial loan modifications, new defaults are continuously increasing.

“The sheer scale of the problem is preventing the loan modification programs from having the kind of impact we’d all like,” senior vice president for marketing Rick Sharga of Realty Trac said.

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