The fact of the matter is, it its very expensive to purchase California real estate. The higher the price, the more difficult it is to secure financing. In recent years, many lenders have offered A-Alt or subprime loans to people who would have otherwise not qualified to become a homeowner. What is unfortunate is many recipients of this type of loan are defaulting. The default rate is occurring at an alarming rate. The lenders now find themselves on the receiving end and are getting these homes returned to them, often in disarray. Lending organizations are being forced to create completely new departments to handle the influx of paperwork and properties in order to document and attempt to find a new homeowner for the real estate.
If a particular area has many unoccupied homes, it tells any prospective buyer that the area is troubled. Unoccupied properties also are an invitation to squatters, loitering and looting. These unsavory practices decrease the value of the property as well as surrounding properties, making it difficult to not only sell, but to sell at a value close to the home’s suggested worth. Fortunately, several companies have stepped in to assist a possible refinancing with the troubled homeowner. Bank of America, Citibank and Wells Fargo have developed programs enabling note holders of subprime loans the opportunity to refinance the principal owed on the house to a price that will meet their budget. The California economy needs California foreclosure listings to decrease. Hopefully, real estate lending companies are learning from its mistakes.