ARMs speed up foreclosure activity in Bay Area
Foreclosures are a painful reality in Bay Area as increasing numbers of homeowners are in danger of losing their homes. These people are finding themselves unable to pay their home mortgages or sell for enough money to cover their loans. Nearly 3,000 homeowners in the nine-county Bay Area got default notices from their mortgage lenders in the April-through-June period.
According to experts, house values are not appreciating at the expected rate. At the same time, homeowners are unable to handle rising monthly payments on their adjustable-rate mortgages. These increasingly popular and controversial loans have made homeowners rush to loan officers. They want to refinance their adjustable-rate mortgages or second mortgages into fixed-rate loans. Mercurynews.com reports:
Experts said the spike in defaults suggests that as home prices flatten or drop and higher interest rates squeeze household budgets, even more Californians will slide toward foreclosure in the coming months.
Read more: Bay Area foreclosures spike; still near historic lows
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