Economists says foreclosure situation seems to be better….. are they?
So which group of economists is correct, are foreclosures truly decreasing or are they going to be increasing? Depends on the data, I say. As a San Jose Short Sale agent, what concerns me are the two items mentioned in the article. First, I think everyone will agree that unemployment will be a driving force behind foreclosures in California. Unless we can find jobs for California’s 12% unemployed, even with loan modifications, it’s just a matter of time before these folks will face foreclosure. The mortgage modifications for most people will simply delay the inevitable by a few more months, unfortunately.
Secondly, there is the issue of the wave of re-setting adjustable mortgages which are scheduled for the next couple of years, chief among them the deadly Option ARMs. Once these start to re-set (and California has the most Options ARMs of all other states), in conjunction with high unemployment rates, we are going to see some serious carnage. I hate to sound so pessimistic, but those are the fact that I see driving foreclosure activity in the coming few years.
[...] am a firm believer that the second wave of foreclosures will be triggered by multi billion dollars worth of Option ARMs recastin… The problem has been brewing quietly and is the big secret in the industry today. It is the [...]
[...] until we can resolve this issue of unemployment, foreclosure will continue at records levels, unless we can address one of the root causes: unemployment . People simply do have have sufficient cushion in their savings to allow for sustenance during [...]