Taking The Measure Of California Foreclosures And What Might Happen To California In The Future
How will the Golden State deal with California foreclosures at present and in the future? This question is much easier to ask than to answer, of course, especially when it comes to such a diverse state like California. It's been rocked by the recession as well as structural issues with its real estate markets, for sure, and any forecasting will need to take a look back to see how it all began in the first place.
Foreclosures in California, much like foreclosures elsewhere, occur when owners of property or real estate can no longer make the payments on their property or real estate. As with much of the rest of the country, many people bought into California homes with the expectation that they'd soon make a profit from the sale of those homes, and they were right for quite some time.
Unfortunately, the recession that has hit the entire nation first broke out in California a few years ago and caught many home owners out there unawares. Sadly, many of these homeowners were sitting on initially-low mortgages that were tied to interest rate adjustments that soon led to monthly payments going through the roof.
Just as sadly, these people (home owners and investors alike) made a calculation that they could buy much more home than they would have been allowed to try for just a decade or so ago. They thought they could get out of the market while it was still on top and they usually gambled correctly for a time, leaving the market with a handsome profit before moving on to an even larger home to do it over again.
They fail to take into account that every boom is eventually followed by a bust and that the trick would be in timing the market. However, the bust happened quite suddenly and many people sitting in the real estate market or living in a home they thought they'd be up to sell for profit were caught out. The rate of CA foreclosures, though, this time is also partly due to the willingness of people to go straight to foreclosure, which is a new phenomenon.
It doesn't help that California was somewhat limited in what it could do to bank money or fund mechanisms that might have been able to deal with this before hand because the property tax revenue it was collecting was artificially limited by the famous Proposition 13, the famous anti-property tax initiative. Once the decline in home values began it was inevitable that the rate of CA foreclosures would go up.
Looking back, it's easy to see why what happened did indeed happen. The trick for the state has now to get the right kind of mortgage assistance and legislation true that will help people stay in their homes more easily and avoid going to foreclosure right off the bat. Unfortunately, many are looking at that route as the way to go instead of trying to stay within homes that are worth less than they owe on them.
It would seem that the rate of CA foreclosures is almost a natural side effect of the speculative real estate activity that had been occurring for at least a decade out in California. Unfortunately, the state has only a few tools it can use at present due to its own budgetary issues brought on at least in part by Proposition 13. Hopefully, though, it'll be able to do something more comprehensive in the near future.
Foreclosures in California, much like foreclosures elsewhere, occur when owners of property or real estate can no longer make the payments on their property or real estate. As with much of the rest of the country, many people bought into California homes with the expectation that they'd soon make a profit from the sale of those homes, and they were right for quite some time.
Unfortunately, the recession that has hit the entire nation first broke out in California a few years ago and caught many home owners out there unawares. Sadly, many of these homeowners were sitting on initially-low mortgages that were tied to interest rate adjustments that soon led to monthly payments going through the roof.
Just as sadly, these people (home owners and investors alike) made a calculation that they could buy much more home than they would have been allowed to try for just a decade or so ago. They thought they could get out of the market while it was still on top and they usually gambled correctly for a time, leaving the market with a handsome profit before moving on to an even larger home to do it over again.
They fail to take into account that every boom is eventually followed by a bust and that the trick would be in timing the market. However, the bust happened quite suddenly and many people sitting in the real estate market or living in a home they thought they'd be up to sell for profit were caught out. The rate of CA foreclosures, though, this time is also partly due to the willingness of people to go straight to foreclosure, which is a new phenomenon.
It doesn't help that California was somewhat limited in what it could do to bank money or fund mechanisms that might have been able to deal with this before hand because the property tax revenue it was collecting was artificially limited by the famous Proposition 13, the famous anti-property tax initiative. Once the decline in home values began it was inevitable that the rate of CA foreclosures would go up.
Looking back, it's easy to see why what happened did indeed happen. The trick for the state has now to get the right kind of mortgage assistance and legislation true that will help people stay in their homes more easily and avoid going to foreclosure right off the bat. Unfortunately, many are looking at that route as the way to go instead of trying to stay within homes that are worth less than they owe on them.
It would seem that the rate of CA foreclosures is almost a natural side effect of the speculative real estate activity that had been occurring for at least a decade out in California. Unfortunately, the state has only a few tools it can use at present due to its own budgetary issues brought on at least in part by Proposition 13. Hopefully, though, it'll be able to do something more comprehensive in the near future.
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