A story on the latest foreclosure numbersfrom today's Bakersfield Californian.
They interview my favorite mortgage broker, Tim Cox. You guys remember him. He is the broker who in the Fall of 2005 claimed that "only a natural or man-made disaster would drive home prices down". I wonder how many times he used that line on his clients right after he offered them some verses from the Bible? Now he claims to be offering up prayers for those who are losing their homes.
Anybody thinking this is going to get better -- that's not true," said Bruce Norris, a Riverside investor who analyzes California's market.
In recent years, borrowers turned to riskier loan options to keep up with exploding
prices, he said.
And many of those loans have yet to reset. Higher interest rates generally kick in after three years, meaning today's foreclosures may foreshadow many more, Norris said.
"I'm not only a Realtor," Atondo said, "I'm a counselor now. These people come crying."
Much of Atondo's business is in Lamont, where he spends four or five evenings each week sitting in the McDonald's on Main Street, fielding requests for help from distraught homeowners.
Lenders and real estate agents took advantage of uneducated consumers, he said.
"There were a lot of Realtors that were encouraging -- especially Latino clients -- to buy houses they couldn't afford," Atondo said. "They've left a mess."
Tim Cox, the owner of Crown Mortgage, says it takes at least three late mortgage payments before you get a notice of default. By then, "a mortgage lender won't help, you can't sell and there's (usually) not enough equity to refinance."
"I really think the only thing they can be offered is prayers, and the hopes this works out for them," Cox said.