California - call for halt to foreclosures
May 2007
The huge rise in foreclosures resulting from predatory loans has led the California Reinvestment Coalition to urge lenders to call a halt to foreclosures. The group say this is "the only way to save California homeowners and neighborhoods from economic devastation". Letters were sent to the CEO's of Citibank, Bank of America, Countrywide Home Loans, Merrill Lynch, Washington Mutual and Wells Fargo, calling on them to stop foreclosures. The CRC suggests that financial solutions should be found that allow borrowers to keep their homes. Furthermore the organization suggests that these lenders work with community organizations to develop solutions to the growing foreclosure crisis.
In 2006, 21 of California’s 26 metro areas suffered housing price declines and the CRC letter claims that the problem of declining home prices can only worsen as more homes go into foreclosure, "fueling a cycle of falling home values and increasing foreclosures."
While the foreclosure problem is seen as predominantly affecting the lower end of the market driven by predatory loans, many are worried about its impact on the housing market as a whole. Southern California home sales have reached a twelve year low and some analysts are suggesting that increases in inventory could continue putting downward pressure on prices. This contrasts with an earlier period when growth controls and regulatory barriers restricted supply during a time of high demand, boosting California's share of million dollar homes. Sentiment has also changed from the period when growth in California luxury home values began.
Nationally, foreclosures are up 62 percent over April last year according to Realtytrac.
Technorati tags: California housing bubble | Real Estate | Foreclosure |
