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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (14644)	5/28/2004 10:52:46 AM
From: russwinter	Respond to of 110194

This site(located by misheldo on his site) is going to the lab tools for the purpose of tracking the real world outside the Land of Oz. The truth shall set you free: May 24, 2004 09:05 AM US Eastern Timezone Foreclosures.com: Specter of Defaults Lurks Behind California Sales Surge SACRAMENTO, Calif.--(BUSINESS WIRE)--May 24, 2004--Foreclosures.com, a northern California based distressed property investment advisory firm, reported today that widespread use of adjustable rate mortgages by California homebuyers in 2003 could lead to a rise in defaults in coming months as interest rates rise. "A little over 15,000 homes in California entered the foreclosure process in both Quarter four of 2003 and Quarter one of 2004," said Alexis McGee, president of Foreclosures.com. "With two consecutive quarters of flat foreclosure activity, we can say that defaults returned to their baseline after victims of the 2001 recession were washed out of the system. Now, we expect defaults to start rising again as steady rate increases put adjustable rate mortgage borrowers at risk." Ms. McGee joined other housing industry experts in attributing the record home sales volume and price acceleration seen in March to a rush to buy before interest rates put buying a home out of reach. "A buying surge usually happens whenever rates pass the low end of a cycle and start back up," she said. "Soon thereafter, you'll begin to see the impact of rate increases on homeowners with adjustable rate loans." Ms. McGee said that the San Francisco Bay Area and Orange County were most vulnerable, with 65% of buyers in the San Francisco Area and 67% in Orange County using adjustables in 2003 to qualify for more expensive homes. "Many of those buyers," she pointed out, "stretched themselves to the limit to qualify for homes in a market with rapid price appreciation. With lenders allowing payment/income ratios of over 40% it won't take much of a payment increase to put those people in distress. The next 18 months will be a critical period." Scott Anderson, a senior economist at Wells Fargo, predicts 30 year fixed rates could reach 7.3% to 8% during that time. "That will drive payments on adjustables up significantly," said Ms. McGee. Foreclosures.com publishes daily pre-foreclosure property lists and has helped investors locate troubled homeowners with their website www.foreclosures.com since 1992. The company also serves markets in the metro areas of Las Vegas NV, Phoenix AZ, Chicago IL, New York and all of New Jersey. LATEST NEWS 11:04 AM MST Monday Valley foreclosure rate up 38 percent Foreclosures.com, a Sacramento, Calif.-based distressed property investment advisory firm, Monday reported that April filings of Notices of Trustee Sale Auctions in the Phoenix metro area were running 38 percent ahead of the foreclosure rate in May 2003. "We saw 1,170 new filings of trustee sales in Phoenix this April," said Alexis McGee, Foreclosures.com president. "That's much higher than the 731 reported in May of 2003, when Phoenix was still in recession." She added that, while foreclosures were down from a seasonal peak in January 2004, "foreclosure activity is remaining stubbornly high." McGee speculated that rising interest rates would probably push foreclosures higher by the end of the year. "Many home buyers stretched themselves thin to buy bigger homes during the recent boom in the Phoenix housing market. As rates stayed low, adjustable rate loans became very popular," McGee said. "Now payments on those loans will start going up, and lots of new homeowners will feel the squeeze." The firm tracks foreclosure activity in the Phoenix metro area and 18 California counties, Clark county Nevada, Chicago metro, New York metro, and the state of New Jersey. Foreclosures.com publishes daily preforeclosure property lists at www.foreclosures.com.