Monday, November 29, 2004

Expect Rise in California Mortgage Defaults by Q2 2005

Foreclosures.com:

SACRAMENTO, Calif.--(BUSINESS WIRE)--Nov. 29, 2004--As mortgage rates move up in response to strong job growth, Foreclosures.com, a northern California based investment advisory firm specializing in distressed property, expects a surge in mortgage defaults by the second quarter of 2005.

"Employment, or the lack thereof, is no longer the primary cause of foreclosure activity," said Alexis McGee, president of Foreclosures.com. "The problem now is that too many households are overloaded with debt." Ms. McGee added that, during a long period of below normal interest rates, consumers continued spending and financed their purchases with adjustable rate home equity credit lines. "You could say," said Ms. McGee, "that homeowners got addicted to a combination of low interest rates and double digit price appreciation every year. Now that combination has reversed itself."

Ms. McGee pointed out that, even before rates started up, the housing market had begun to soften with falling sales volume in many California markets and a slowing rate of price appreciation. "Now, because mortgage rates have begun to rise, we're seeing a year-end surge in buying by so-called fence sitters who want to avoid the higher loan payments they see coming down the road."

Ms. McGee went on to say that this sales activity is pulling the future into the present, and that she expected California markets to experience something of a slump in the first quarter of 2005 and that filings of notices of default would come soon after that.

She added that her company had always seen a correlation between rising interest rates and rising levels of foreclosure activity.

"As the cost of money increases, there will be more downward pressure on prices. The refinance window will be closed to homeowners in distress, and payments on all those adjustable equity lines will increase rapidly, squeezing some budgets to the breaking point," Ms. McGee said.

Foreclosures.com has been publishing pre and post-foreclosure property data and assisting investors since 1992. The company serves markets in Chicago IL, the state of New Jersey and the metro areas of Phoenix AZ, Las Vegas NV, New York, and eighteen California counties.

"Our mission is to help investors locate troubled homeowners so they can help these people conserve some equity for a new start," said Ms. McGee. "That's far better than seeing them lose everything in a Trustee's Sale on the courthouse steps."

1 Comments:

At 9:55 PM, Anonymous Anonymous said...

Amsec safe
safes
buy a safe

 

Post a Comment

<< Home