Southern California Ravaged By Foreclosures

February 1st, 2008

Fontana city in California was once bursting with activity – the congested sprawls being sliced into sub divisions. For those who found it too hot to look for houses in Los Angeles of San Diego the next best option was here in San Bernardino County lying not far from Los Angeles.

But the hustle and bustle of South California took on a gloomy look as foreclosures followed fast on the heels of the boom in real estate. House prices began to tumble and Fontana became the eye of the foreclosure storm in California. In 207 more than 7,700 lost their houses to foreclosures in San Bernardino County. This was a record high jump of 719% in just one year.

City Councilwoman Janice Rutherford recalls that her neighbour lost the house for which they had paid $250,000. When the actual repossession by the bank took place the debt had doubled. Repeated loans had been taken when the equity had gone up but when the values collapsed the house was worth less than the mortgage amount.

The story is the same everywhere. People had been taking out cash from their properties just like the do from ATM machines. But the wheels turned in Southern California known as the Inland Empire.

Rutherford sadly comments that people have taken the lead from the government by spending more than they earn without thinking about the future. Reckless living has a price tag. Today the sky is overcast with no surety about tomorrow. It is not just the housing industry but people from all walks of life are being affected in a chain reaction – from car dealers to developers. Marty Stout is the chief operations officer of Mayer Roofing. His company was bursting with success during 2005 with 850 roofers. But now the number has climbed down to 200.

Each individual has a story to tell. Betty Larkins from Moreno Valley became a victim of absurd refinancing as a result of which her monthly repayments increased $1,700 to $3000. Supported only by her social security and pension it was impossible for her to keep running. For some time she had battled but it was fruitless – she has to leave the house within few days. She sees her story being repeated over and over again across the country.

The worst is yet to come with rates of interest of many mortgages set to rise in 2008.