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canny man

Foreclosures Up Hugely In Us

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The US market is in a much worse state than I thought - 88% of first quarter loans were cash out refinances!

SACRAMENTO, Calif.--(BUSINESS WIRE)--May 22, 2006--California based ForeclosureS.com, a real estate investment advisory firm and nationwide foreclosure lists publisher, reported today that 2006 foreclosure activity in the Northeast is up sharply from 2005 levels.

"In Massachusetts," said ForeclosureS.com president Alexis McGee, "we saw 1551 new foreclosure filings in April 2006. As of May 13, foreclosure filings were up 35% from the same period in 2005."

"According to our research, foreclosure activity in New Jersey reached a level of 4,425 filings in the first quarter of 2006 as opposed to just 459 in the same quarter in 2005. That's an almost ten fold increase," warned Ms. McGee. She added that she expected the situation to get worse through the rest of 2006 and into 2007.

Ms. McGee expressed concern that homeowners were still using their houses as ATM machines. She continued, "Freddie Mac just reported that 88% percent of the loans they purchased in the first quarter of 2006 were cash-out refinances. With the real estate markets going flat, the refinance resource will dry up. And with interest rates continuing to rise, payments on so-called exotic adjustable loans would become unaffordable for many households."

Ms. McGee pointed to a recent report from the FDIC stating that 49.5% of recent purchase money loans were categorized as "high risk loans." "These interest only loans and option payment ARMS are financial time bombs that are going to lead to trouble for many homeowners," she said.

She added that she found it "amazing" that some lenders were still pushing home equity loans and lines of credit up to 125% of the home's value. "With markets cooling down and prices leveling off, that's another recipe for disaster," said Ms. McGee.

ForeclosureS.com has been tracking housing markets, publishing foreclosure property information and training and assisting investors since 1992. The company extended its foreclosure property listing service nationwide in late 2005.

"Our mission at ForeclosureS.com is to assist our investor clients in first locating homeowners in financial distress and then to show our clients how to work with owners in default to develop a win-win strategy for both. Ideally, distressed owners will sell their way out of foreclosure to our investor clients and conserve some equity for a new start. That's far better than seeing them lose everything in a foreclosure auction on the courthouse steps."

Ms. McGee also announced a new feature for the company's website. Based on request, we now have our foreclosure research statistics available at our website http://lists.foreclosures.com/ListAreasStats.asp. Simply select your state, and then your county to see the number of foreclosure filings by quarter. Our stats are also broken down by Notice Type (Notice of Default, Notice of Trustee Sales and REO's). For additional information, please contact alexis@foreclosures.com


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You have to hand it to the Americans, when they do something they do it big!!

I live in New Jersey, the average price of a home is $400,000 for a silly 2 bedroom house.

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The above tells you why the San Diego, CA market is starting to crash. The property is in a lower middle class neighbourhood where you see the odd older pick-up with oil dripping on the ground and chain link fencing kept up in the weaker spots by old tyres stacked up.


Edited by Realistbear

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Statistics show more Californians are struggling to keep up with house payments
. Statewide, first-quarter 2006 default notices issued when people miss at least two payments reached their highest level in two years. The notices are the first signs of potential
foreclosures -- and have jumped 49 percent
in Sacramento County over the same time a year ago, reported La Jolla-based research firm DataQuick Information Systems.
Default notices jumped 90 percent
in Placer County and 14 percent in Yolo County, while falling in El Dorado County.
Sandy Sargent, a Sacramento real estate agent, believes many new Sacramento-area homeowners spend 60 percent of their paychecks for housing-related expenses that include a mortgage, utilities and taxes.
"People will do almost anything to get themselves in a home," she said.

All bad things must come to an end and this housing bubble is ending ugly. :o

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