Nature hates vacuum. Man has deserted houses and homes – hounded out by foreclosures. Mosquitoes have taken over. 23 types of bloodsuckers are thriving in the stagnant waters of deserted pools. 1 million larvae come alive only in one pool. The residents of the locality are now in grave danger of being afflicted by the West Nile disease. In Contra Costa County already three are down with it. As yet Alameda County has not reported any human being afflicted by the West Nile scourge.
Vector technicians went on rounds of inspection and came up with the fact that all pool related problems are from abandoned foreclosed houses. They have seen for themselves the stinking waters bubbling with the menace and sometimes dotted with floating opossum carcasses. Larvae restricting chemicals were only short time measures and hardly adequate considering the dimensions of the problem. This new danger has given the foreclosure crisis another twist.
Contra Costa County set a record from April to June. 2,316 default notices have been sent out – this being the first step leading to foreclosure. 778 units have already foreclosed. During this same time Alameda County saw five high jumps in foreclosures and double jumps in defaults since the previous year. The story does not end with foreclosure. These houses overstay in the market because of the slump in buyers. This messes up the pools as mosquitoes bide their time for the fatal sting.
Warnings are being sent out to realtors to properly maintain the units that have been taken over. An educative alert is the call of the hour. Dead leaves, abandoned boats or swimming gear left behind choke the pools further as a carpet of rubbish gets entwined. Two-inch long mosquito fish known as guppy fish are being released to gobble up 500 mosquito larvae each day. To the fish it’s a spaghetti feast! One agency is rearing guppies and distributing them free to takers. People living next to foreclosed are having a trying time to cope with the rising menace. Complaints are pouring in. Governor Schwarzenegger sanctioned emergency founds to three most hard hit counties worth tens of millions of dollars. Contra Costa district has decided to levy a fine of $1,000 per day for discarded pools but the problem is to pinpoint the owners during the ongoing foreclosure process. Some realtors are maintaining these as swimming pools.
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Foreclosures increased by leaps and bounds in Pima and Maricopa County. The rise was by 311%. In September this year the number rose to 2,414 from 777 in 2006. In Arizona, the race was led by Maricopa County with 2,127 foreclosures. Pima County recorded 287 last month.
It is the same story coming from sufferers. They saw a house. They fell in love with it. But soon the love has turned sour. Foreclosures are now pinching them. In Arizona, the price of land was reasonable even during the housing boom. So many could afford comfortable houses. But when the mortgage interest began to more than double the situation became dangerous for the house owners. The Phoenix area is one of the worst afflicted spots but this foreclosure virus has attacked the entire nation with some pockets being worse off than the others.
If it is night in one part of the globe it is day in another. For some the sun is shining and opportunities galore are opening up to make a bargain deal. The housing market is plummeting and with sellers more than eager to get rid of properties at any cost, one could easy snap up a dream house. A vacation region like Arizona seems to be the best place to buy a unit. The house can be rented out during winter when the birds fly in from colder climes. Nevertheless, one should be wary about anything that is too good to be true – because in all probability it is not true. Before making a decision the homework pertaining to foreclosure sales should be carefully done. The advice is to think before the ink. No step regarding buying foreclosure houses should be taken without taking the help of real estate agents and legal experts.
The sub-prime mortgage loans are primarily held responsible for this foreclosure crisis. The original idea was that those who could not avail of prime mortgage because of low income and weak credit record would now get an opportunity to have a house of their own. Not too many questions were asked at the time of granting loans and the borrowers moved into houses without any down payment and initial low payment. But when the interest began to double, mortgage payments could not be continued. Millions were served foreclosure notices right across the country.
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The sub-prime market was created for those with bad credit and could not qualify for prime loans. It was hoped that by introducing it all and sundry would benefit and become a house owner. But nobody took into account the greed and predatory nature of Man trying to squeeze and choke another. When interest rates began to roar foreclosure notices became common creating panic and depression across the country.
Foreclosures are taking their toll in Hawaii also. In comparison to last year the numbers more than doubled last month. It is up by 114% in September 2007 compared to that of September 2006. Thus it is higher than the national average of rise of 99%.
The Hawaiians had bought houses beyond their means. Prices of real estate were soaring and people took easy foreclosure loans to get into them. Some of the loans were sub-prime loans where the interest was floating or ARM. It meant double jumps within a two to three years. When the time came for making higher payments the people buckled under. They just could not afford it. The result was foreclosure notices.
The situation in other states is worse. In Hawaii the ratio is 1:3,600 which puts it in the group of last ten, in nation wide figures. However the situation is slightly different here because of the various ethnic groups that reside. The natives have strong bonds and just cannot walk away without paying dues. The set of values here are different and that is why prices are not slumping here at the same rate as the mainland but holding on. This means there is plenty of equity left on the foreclosed houses. The people are having trouble no doubt but they are clinging on with hopes and firm determination not to relinquish hold.
The general advice is that they should act now without delay. The alternative is to hunt around for a fixed rate mortgage and shift from the ARM that inevitably leads to foreclosures. Another point is for those who are just about to buy a unit – be sure that it suits the pocket of the individual. Over reaching gets one nowhere but into a foreclosure mess. The average price of a condo is $300,000 and it is double that for a house.
It is expected that this high trend of foreclosures will continue for another year or so.
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It is always better to lift the veil off the enemy so as to know better and be well prepared. The main focus is not on what has already happened – that is the foreclosure - but on what will happen in the future – the credit record.
If the borrower knows that there is no other way out of the mortgage mess it is best to sell off the unit and buy something more affordable and less taxing on the peace of mind. Sometimes the parent mortgage company will offer refinancing alternative or modify the loan to avoid foreclosure. One can also look around and compare the options going around with credit unions, banking institutions and mortgage houses.
For those who are only behind in one or two payments and hopes to be able to tide over the money crunch, the lenders might throw the option of Forbearance. It permits the borrower to pay the arrears with the current dues within the next 3/6 months. To avail of this the lender must be contacted well before more dues pile up.
The next alternative for those who can see the light at the end of the tunnel is to catch up on dues by taking a fresh loan from a friend or any other source. There are hard-money-lenders who can be located on the Internet. The loan amount is small but the interest rate is high. This path is best for those who are sure about being to pay in the future and income is assured.
Bankruptcy is another way out that can be taken before the foreclosure hones in. It stains the credit history for about a decade and is definitely not the recommended cup of tea for all. For details and ground facts the best source will be a bankruptcy attorney.
Lenders are not too keen on foreclosures and might well offer the option of deed-in-lieu-of-foreclosure to avoid costly time consuming foreclosures. The borrower hands over the deed and a foreclosure is not reported by the lender.
The best bet is to sell the property before the foreclosure. This will minimize credit damage. In a short sale the property is sold for less the amount than what is owed by the borrower. Lenders were at one time adamant but with property rates falling negotiations are more easily reached then before.
