Surprising to many, defaults only rose just over 6 percent, which is way down from the previous three months. This
has the president of DataQuick scratching his head and admitting that they are not sure why this has happened. He thinks it
could be a couple of factors, one being that this may be a sign that foreclosures have hit their peak, or he thinks it
may be that lenders are so busy, they don't have time to process paperwork.
Even if foreclosures have hit their peak, experts are warning that there may be yet another wave of loans defaulting such as
pay option adjustable mortgages and Alt A loans. In addition, even when the foreclosure rate declines, some are saying that
it might take years to recover from all the homes being sold at low prices and for the housing market to absorb them.
Areas like
La Jolla,
Del Mar and
Coronado might not be immune to the mortgage crisis either.
Some experts think that the Alt-A loans, which are in between quality prime loans and subprime, might affect the
high priced real estate markets, which up to this point have not seem a lot of foreclosures. "We're already seeing some of
it in areas like Beverly Hills, CA, where last year, at this time, there was only one forclosure, whereas, this year there
have already been eight.
Real estate giants Fannie Mae and Freddie Mac are hammering out the final details with the housing relief legislation, giving
the Treasury Department the opportunity to increase the line of credit and possibly stock options. As of now, some are
predicting that there is better than a 50/50 chance that the companies will not need government bailout. However, many
experts agree that the companies may need up to twenty five billion dollars in aid, from the government.
|
