More foreclosed homes are expected to flood the housing market in the suburbs of California’s Riverside County, according to housing tracking firm ForeclosureRadar, newspaper North County Times and California housing analysts.
The suburban communities of Riverside County, located between Rancho California and Perris and near the Moreno Valley, are viewed as at risk of turning into communities of foreclosed homes as formerly financially able homeowners lose jobs and lose their abilities to refinance loans.
From 2004 to the last months of 2007, most of the owners of foreclosed homes were borrowers of subprime mortgage loans, according to the North County Times. Starting 2008, homeowners being foreclosed are borrowers with good credit ratings but who took on highly risky loans such as Alt-A and flexible rate mortgages with options. Even if the other homeowners are still employed, they are faced with loan balances usually 50 percent higher than the current values of their homes.
In February, a total of 1,550 housing units in the southwestern part of Riverside County became foreclosed homes, in addition to the 1,441 units already added to foreclosure listings in January, as compiled by ForeclosureRadar, a housing tracking firm based in Northern California.
Meanwhile, several housing tracking companies report a total number of 16,000 foreclosed homes in the county’s southwest part since January 20.
Unemployment is the major factor of rising foreclosures, according to Bruce Norris, head of Norris Group. He said the area bounded by Riverside and San Bernardino counties has a jobless rate of nearly 12 percent. He also expects a higher level of state foreclosures as jobless residents leave California to find jobs.
The rate of California foreclosures in February continue to put California among the three states with the highest foreclosure rates, based on RealtyTrac’s report for 2008. It had 80,755 foreclosed homes in February and posted a foreclosure rate of one unit in every 165 homes receiving a foreclosure filing.
Mason Gaffney, professor of economics at the University of California in Riverside, said large numbers of foreclosed homes will continue to batter the books of mortgage banks and will reduce their ability to offer mortgage and commercial loans.
According to North County Times, there are about 700,000 foreclosed houses for sale across the country which are listed in the records of lenders but not yet forwarded to brokers for sale.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read foreclosure news at EForeclosureMagazine.com.
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