Traditionally, California has had a low foreclosure rate. However, in the last quarter of 2006, 37,273 Default Notices were sent to California Homeowners; an increase of 36.9% since the previous quarter.
High appreciation and strong sales in many areas have masked the possibility of on-coming problems. With the cooling housing market; higher interest rates; those inventive loans (targeted at people with weak or blemished credit), and prices out-of-reach for many buyers, according to the Center for Responsible Lending (CRL) 2.2 million American households will lose their homes; $164 billion due to foreclosures.
A Default Notice is the prelude to foreclosure; however, most Homeowners emerge from this tragic situation by:
1) Refinancing: drawing on the equity of the property to bring the mortgage payments current OR
2) Selling the Property: using the equity of the property to pay off the loan
Even so, earlier in the year, 32 percent of Homeowners who found themselves in default actually lost their homes to foreclosure; a year ago it was only 8 percent. This is in line with a study conducted by the Center for Responsible Lending who predicts that...
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