Unabating Foreclosures Ravage Southern California

NPR ^

[bshomoic]

All Things Considered, January 30, 2008 · The booming city of Fontana, Calif., is a thick sprawl of closely packed subdivisions. People who couldn't afford a home in Los Angeles or San Diego could buy one here — in San Bernardino County, about 50 miles east of Los Angeles.

But as housing values tumbled — and subprime mortgages ballooned — Fontana became one of the many epicenters of foreclosures in Southern California.

In San Bernardino County last year, more than 7,700 homeowners lost their homes to foreclosure — a 719 percent increase in just one year.

Janice Rutherford is a city councilwoman in Fontana. Her neighbors lost their house to foreclosure. She figures they paid about $250,000 for the house.

By the time the bank repossessed it, the neighbors owed more than twice that amount: They had borrowed repeatedly against its inflated value, and when values slumped, they were "upside down" on their mortgage — with negative equity.

Stories similar to this — of people using their property like ATM machines — are plentiful in this region of Southern California, known as the Inland Empire.

"I feel bad that people got themselves in over their heads. People in these houses borrowed against the future, spent money they didn't have. Our government does the same thing, so it's no surprise that people think, 'Hey, this is the way to do it,' " Rutherford says.

And when housing tanks — and the economic forecast for the future looks gloomy — everyone feels the pain, from car dealerships to housing contractors.

Marty Stout, chief operations officer for Mayer Roofing, says that at the peak of his company's business in 2005, it had 850 roofers working for it. Now, there are 200.

Betty Larkins, of Moreno Valley, Calif., is another homeowner who is feeling the pain of foreclosure. She fell victim to what she calls a "ridiculous re-fi," and her monthly mortgage payment soared to $3,000 from $1,700. With just her Social Security and pension income, she couldn't keep up.

Larkins fended off foreclosure for a while. But now, her house has sold at auction. She has to be out by next Wednesday.

Larkins says she recognizes her own story when she reads about foreclosures in the paper.

"I say, 'Gosh, here's another one of me. Gosh, what's happening with the world?' All of it is not necessary, that's my thought," she says.

And in 2008, people expect the foreclosure rate to spike again — with another batch of adjustable mortgages due to reset at higher rates.

[ketsu]

I think girls and boys sitting in school together being taught sex education from an adult point of view leads them to search (movies,internet, etc.)and experiment. I agree that there are a number of things that lead to the promiscuity that we see. To say one is ranked higher than another is a tough call.

Trust me it's not. If you talk to young people today their values are almost entirely shaped by television and, increasingly, the internet. School has very little to do with it aside from being a place where kids are in close proximity to one another.

[taxesareforever]

School has very little to do with it aside from being a place where kids are in close proximity to one another.

And on that, we will disagree.

[taxesareforever]

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=60004

[purpleraine]

I think you’ve got it right. I would add that Chinese from Hong Kong, anticipating coming under the control of China, put $5 billion in California and mitigated much of the negative impact on the state.

[purpleraine]

If you or yours are in a bind, talk to whoever has your loan. Many lenders are in negotiating mode and don’t really want foreclosures on their hands.

[snowsislander]

If you or yours are in a bind, talk to whoever has your loan. Many lenders are in negotiating mode and don’t really want foreclosures on their hands.

No, it's nothing personal; I am just curious how one can "trade" non-assumable mortgages.

[purpleraine]

The leverage is against the lenders now. They really have their hands full of properties. Some are bundling and selling for 50-60 cents on the dollar (market vallue). Some are open to deals.

[taxesareforever]

School has very little to do with it aside from being a place where kids are in close proximity to one another.

http://www.philly.com/philly/hp/news_update/20080217_Sex_education_led_by_teens_divides_parents.html

[Eva]

I remember, back in the eighties when, thanks to Jimmy Carter, the interest rates rose to 18%. That’s right, 18%, and then they took away the assumable mortgages. If you think the housing market is bad now, you should have seen it back then. People were building customs homes that they never got to move into because they couldn’t afford to convert to a regular mortgage. People were taking seconds to help sell their homes and then when the new buyers defaulted, the sellers ended up either taking the house back, or losing their money because, the housing prices were dropping so fast.

Then came the nineties and attempts to limit growth, and the Mello Roos developer fees and the housing prices went up $100,000 in one year. The prices have been up and down since then but never as bad as they were in the eighties.