Understanding how CA foreclosures can be dealt with by California leadership means first of all understanding how the Golden State got itself into the foreclosure problem that much of the rest of the country began to experience a few years after California began to. Some of the problem has to do with speculation and some of it has to do with a failure of political will. It all added up to a significant issue, though.
As it relates to the issue of CA foreclosures and how they increase or decrease (they’ve been increasing for the last few years), it’s worth noting that California, Las Vegas, Florida and other areas all featured extremely vigorous real estate markets for a number of years. With the supply and demand model completely in favor of the seller prices for homes went up, sometimes unreasonably or unrealistically.
California political leadership (to be fair, other states also suffered from a failure of leadership) tacitly encouraged much of this speculation for number of different reasons. More people owning homes meant more homes that were worth more in terms of property tax revenue. States and municipalities could add services, then. Unfortunately, the bust — when it hit — hit very hard in this case.
In the case of California, a true “bust, ” or drop in the price of both new and existing homes began sometime in 2006, though home prices were a little “soft” in some areas (San Diego, for one) for about a year before that. But easy lending standards and a ready supply of cheap money (low interest rates) ensured that many people would be able to obtain home loans for several more years before it all came to a head.
And decline it began to do starting around the middle of 2007. Once the financial markets themselves collapsed in late 2008, all of that speculation and buying and selling out in California dried up and blew away. It was then that real increases in CA foreclosures began to appear. California now has six out of the top 10 cities in terms of their rate of foreclosure, which is not a record to brag about.
There are a number of steps leaders in the state have been taking in an effort to reduce the rate of CA foreclosures. Working in conjunction with federal agencies, they’ve been giving current homeowners plenty of instruction on how to go about taking advantage of loan modification programs being back up by the federal government. There’s also a law — due to run through January of 2011 — aimed at stretching out the foreclosure process.
California leaders hope that the combination of loan modification and lengthening of the foreclosure process may convince more home owners to try to stay in their homes. But with California home prices declined by 30% or even more, it’s the case that a lot of people are sitting in homes worth much less than they owe, meaning they are increasingly looking at foreclosure as the first choice rather than the last.
Whether anything to do with the rate of CA foreclosures will ever be truly amenable to anything other than the natural corrections that market forces seem to impose as a matter of course is a question for the ages. Some think that the Golden State’s foreclosure rate may even be stabilizing and could even be dropping. Time will tell on that forecast, it seems.
Ca foreclosures are very real. If you are worrying about a Ca foreclosure, then there is useful tips out there, you just need to know where to look. The net is a great place to try looking.
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