Foreclosure in California is a hot topic. Although foreclosures occur all over the country, Californians find themselves in the spotlight with a staggering increase in initiated foreclosures.
The Bursting Bubble
Financial experts cautioned Californians to not get carried away back in the early 2000's when interest rates were incredibly low and house values were steadily appreciating. The fear was that Californians were borrowing more than they could afford at rock-bottom adjustable interest rates that would eventually creep up.
The predictions proved valid. Many Californians bought homes which may have been beyond their financial capacity; many people used subprime loans in order to finance their homes. Others refinanced their homes to the maximum when housing prices were at all-time highs, but when housing values started to decline many Californians found themselves owing more money than what their homes were worth and many of these people also realized their adjustable rate mortgages were starting an uphill interest rate climb. The more foreclosures that happened, the lower homes values became, and a perpetual housing problem developed into a real crisis within the state.
Foreclosure in California Counties
Most counties in California have been adversely affected by the foreclosure crisis within the state, but both Los Angeles County and Riverside County have appeared on nationwide listings of high foreclosure rates. In fact, both these counties have held the number one and number two spot respectively on the nationwide listing of most foreclosures in a county. These counties do not corner the market on foreclosure problems within the state, but their large numbers give them the unenviable right to claim the highest number of home lost to foreclosure within the state and within the country.
California Housing Finance Agency
The California Housing Finance Agency (CalHFA) is an agency that provides counseling to potential homeowners as well as to current homeowners who encounter trouble with making timely payments on their mortgages. Governor Schwarzenegger estimates that more than 500,000 Californians have adjustable rate mortgages which will continue to steadily increase in interest rates and put all the borrowers at risk for foreclosure. CalHFA recently received a substantial grant which will allow the organization to increase the spectrum of counseling available to homeowners.
If you are interested in receiving counseling through CalHFA you can contact them at (877) 922-5432.
Additional Foreclosure Assistance California
Homeowners who are facing financial difficulties are encouraged to contact The Homeownership Preservation Foundation, which is a non-profit organization that provides free financial counseling to homeowners who are struggling to make their house payments on time.
The Argument of Initial Fault
California receives a great deal of media attention regarding the nationwide foreclosure crisis because of the huge numbers of both completed and potential foreclosures within the state. Mortgage lenders within the state are often blamed as the initial cause for the problem because of the subprime mortgage loans approved by the lenders. Lenders blame the borrowers who accepted adjustable rate terms despite the very real possibility that the rates would wind up in a rapid incline. Homeowners in California who are facing foreclosure, however, repeatedly ask for assistance from the state government whether it comes in the form of counseling or monetary help. Some lenders within the state have also taken action individually by freezing interest rates and forgiving late fees.
Beyond State Help
Homeowners - regardless of the state they reside in - should always contact their lender first, before even missing a mortgage payment.