The Foreclosure Report

'Next Year Is Going To Be The Bad Year'

The Contra Costa Times reports from California. "By the time Janie Kent received the notice that her two-bedroom, one-bath cottage in San Leandro was going to be sold in three weeks, she was desperate. 'I was in denial, sitting in my house and didn't know what to do,' said Kent. Kent isn't alone. Hundreds of people in Alameda County will lose their homes this year; 176 already have. Thousands more will sit in their home, awaiting what they feel is the inevitable outcome."

"Home foreclosures are on the rise across the East Bay, with Alameda, Contra Costa and Solano counties all reporting data similar to the post dot-com bust years of 2000-01."

"Alan Wolf, a mortgage banking attorney said that interest-only and negative amortization loans seem to be fueling the higher default rates. 'Once those refinanced adjustables hit, it's going to be a big problem,' he said. 'This is not the bad year. Next year is going to be the bad year.'"

"San Ramon Loan consultant Ed Jeffry puts some of the blame on lenders who haven't been historically gentle with borrowers but also faults borrowers for not thinking through loan decisions. 'A lot of problems occur when people enter into a high-cost or subprime loan,' he said. 'Usually because there's no plan and no strategy.'"

posted by Ben Jones @ 1:40 PM