California Dreaming –under the Bridge with your Shopping Cart
Mortgage crisis is still pummeling California
by Jeff Davis
One almost wonders why in Heaven’s name any of the three remaining candidates would want to be President in the horrendous times that are coming? Whoever gets elected President is going to have to face an appalling mess which can’t be solved by any means our Congress would approve (such as mass-deporting Third World invaders from the US). Just when it had dropped off the media radar for a bit, the housing crisis has made its reappearance.
According to the Los Angeles Times: “The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels — reaching an average of more than 500 foreclosures per day — DataQuick said in a report warning that the widening foreclosure problem could ’spread beyond the current categories of dicey mortgages, and into mainstream home loans.’ ”
500 foreclosures per day? That’s a lot of people losing their homes! And this is only one state, California. What happens when all these defaults start knocking over other dominoes? We’ve heard of Countrywide, Bear Stearns and Washington Mutual getting into trouble, but what about the construction industry? There’s no need for new houses if they can’t sell the last batch they built.
The Times article notes “From DataQuick’s report on California foreclosures in the first three months of 2008: ‘Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 47,171 during the first quarter. … Last quarter’s total rose 48.9 percent from 31,676 in the previous quarter, and jumped 327.6 percent from 11,032 in first quarter 2007.’ That translates into 517 foreclosures every day in the first quarter of 2008. DataQuick president Marshall Prentice (notes): ‘The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the loans-gone-wild activity happened in late 2005 and 2006 and that’s working its way through the system. The big if right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans.”
If this isn’t a recession, what would you call it?
The L.A. Times article continues “Default notices — which mark the beginning of the foreclosure process — increased sharply, but not as rapidly as outright foreclosures. From Bloomberg News: ‘California mortgage defaults more than doubled in the first quarter to the highest in 15 years as a drop in sales and prices prevented some homeowners from selling their properties to pay debt…Homeowners received 113,676 default notices in the first quarter, up 143 percent from a year ago, La Jolla, California- based DataQuick said today in a statement. The level was the highest since at least 1992, when DataQuick’s statistics begin. Despite well publicized federal efforts to reach out to homeowners in default the odds that they will ultimately lose their homes appear to be increasing. DataQuick reports that, of the homeowners in default, an estimated 32 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 52 percent.”
Again, you have to wonder just what is going to happen after January of 2009? Right now Americans seem to be at least vaguely aware of the fact that the past eight years under Bush and his evil cabal have been a complete and unmitigated disaster. What will happen when the new President is inaugurated in January of ‘09 and then things don’t get better but keep on getting worse?