The Home That Was To Be Their Nest Egg
ABC 7 News reports from California. “Monday was just another day at Marsh Creek Elementary in Brentwood. School keeps kids focused on things other than the housing slump which has devastated this community. Just a few miles away is the City of Oakley where 620 homes so far this year have been lost to foreclosure. ‘If you drive through a subdivision you see all these vacant and empty homes, and the prices on the homes are 50 percent less than what they paid just two years ago,’ said teacher Dave Behling.”
“Behling bought a house while waiting to sell his old one. When the market collapsed he was unable to sell, forcing him into foreclosure. His wife now has a second job. ‘We’re pretty much like everybody else, pay check to pay check, which is something new to us, because we were never like that,’ he said.”
The Ventura County Star. “More than 400 people who waited in line early Monday morning — some for more than 24 hours — to apply for one of 140 affordable apartments at Oxnard’s RiverPark. Two years ago, Ismael Martinez never thought he’d be in need of an apartment. After years of running his own carwash business, he saved enough money to buy his own home. Then the economy turned, his business decreased and his mortgage reset, doubling from $1,800 to nearly $3,600. He’s sure that his house will be in foreclosure and he’ll need a place to live.”
“‘When your dream comes down and you can’t keep going, you have to give it up,’ he said from an RV where his family took turns warming up over night.”
The Daily Press. “The San Bernardino County Board of Supervisors Monday launched what officials say is a ‘bold economic recovery plan’ to address area foreclosures and the mortgage meltdown. About 42,356 homes in San Bernardino County currently are bankowned, scheduled for auction or have been subjected to notices of default. In the past 11 months, property values in San Bernardino County have plummeted nearly 42 percent. Neighboring Riverside County has seen even more dramatic rates of foreclosures, pushing the two-county region to the forefront of the nation’s foreclosure crisis.”
“County officials say the Economic Recovery Corporation is the best way to manage thousands of residential properties that once were owneroccupied but are now vacant magnets for crime, or that are being snapped up for prices below their real value and turned in to rentals.”
“‘Inland communities are becoming blighted, unemployment is soaring and demand for countyprovided social services is on the rise as a result of this unprecedented economic crisis,’ said Board of Supervisors Chairman Paul Biane.”
“In the next two years, about 240,000 homes in the Inland Empire homes are expected to enter into foreclosure, with experts predicting cataclysmic economic losses that may reach $100 billion.”
The Desert Sun. “The growing number of foreclosed home in Desert Hot Springs is taking a toll across the city, officials say, and on Tuesday the City Council voted unanimously to tighten regulations on owners to better maintain those properties. More than 1,500 of Desert Hot Springs’ nearly 11,000 homes are either bank-owned or in some stage of foreclosure, according to a recent Riverside County report.”
“‘There are literally blocks that are empty,’ Councilman Karl Baker said during a Tuesday meeting. ‘Things are tough – they’re going to get tougher.’”
“The median price of Coachella Valley homes fell 34 percent in October to $225,000, a level not seen since February 2003. In September, the 865 home sales closing escrow posted a 65 percent year-over-year hike, the strongest since January 1988. Fifty-one percent of the homes that closed escrow in October across Southern California had been foreclosed on at some point over the year, according to DataQuick.”
“‘The rise in sales indicates that buyers continue to take advantage of bargains in the marketplace, as the inventory continues to trend upwards, and as more properties with troubled loans contribute to the number of properties for sale,’ said Greg Berkemer, executive vice president of the California Desert Association of Realtors.”
“Most of the price reductions have taken place, and new properties coming in are matching the prices, Berkemer added, observing: ‘Buyers are in a good place.’”
“Thousands of applicants showed up Tuesday and more are expected today for the Jackalope Ranch job fair, where 200 jobs are up for grabs. Job fairs earlier this year at the SuperTarget and Winco stores in north Indio also drew thousands of people looking for work. ‘We expected big crowds, but this is overwhelming,’ said Lee Morcus, co-founding principal of Kaiser Restaurant Group.”
“Coachella resident Rosa Gonzales hasn’t had a job in seven months and was there Tuesday hoping to snag one. ‘It’s hard. There are no jobs,’ she said in Spanish. Carlos Quintanilla, 20, of Indio said he’d take any position they offered him. ‘I pretty much need a job. Not a lot of places are hiring,’ he said.”
The Burbank Leader. “When retailers opened their doors early Friday at the Town Center Mall, it was not to the huge crowds usually seen the day after Thanksgiving. ‘I’ve been here for three years, and I’ve never seen it this slow,’ said Jessica Carls, of Los Angeles, as she came out Old Navy just before 6 a.m. Friday morning laden with three shopping bags.”
“For Pasadena schoolteacher Ana Morales, sales at Old Navy and Bath & Body Works mean gifts for the kids, but not as many for the adults in her life. ‘I’ve definitely cut down on my Christmas spending,’ Morales said.”
The North County Times. “Key measurements showed the region’s economy buckling dramatically in October and suggested that the situation will continue to worsen for the next six months, an economist said Tuesday. The University of San Diego’s Index of Leading Economic Indicators fell 2.3 percent in October, the sharpest drop on record.”
“‘An already difficult situation took a decided turn for the worst,’ economist Alan Gin, who compiles the index, wrote in an accompanying report.”
The Union Tribune. “‘What that says is that there’s no end in sight as far as the downturn is concerned,’ said Gin. ‘And there’s at least a little bit of worry that things could be accelerating on the downside.’”
“Residential building permits declined by more than 50 percent over the past year, largely because of a sharp drop in apartment and condominium construction. Economists previously hoped that San Diego’s early entry into a slowdown meant that the county would be able to recover earlier than other regions. But the depth of the national recession and the constriction in credit has darkened that outlook. Few economists now believe that the county will recover before the nation as a whole.”
The San Diego City Beat. “Of all the unpleasant changes that have come John and Jessica Browning’s way during the past couple of years, perhaps the hardest was the realization that they’d been living in a fantasy world. Anxious to be part of the booming San Diego real-estate market, the Brownings purchased a two-bedroom, 830-square-foot condominium three years ago in Point Loma.”
“‘We bought at the high end at the time, when the market was peaking,’ says Jessica, about to have her second baby. ‘There was a kind of panic at the time that if you didn’t get in the housing market now, when home values were gaining $50,000 to $60,000 in equity every six months, you’d be completely priced out.’”
“The Brownings secured an adjustable-rate mortgage for the $420,000 condo. Soon after, the housing bubble popped, and as it deflated, so too did the couple’s illusions that they were financially well situated.”
“‘We needed to refinance,’ Jessica says. ‘We were pretty confident—we thought that when we refinanced, we’d have a small amount of equity to reinvest. But the market kept depreciating, and we almost couldn’t even get the condo appraised. The mortgage companies were being more cautious about who they lent to. We had to borrow about $50,000 from a friend to stay in the condo.’”
“The Brownings finally managed to refinance into a fixed-rate, negative-amortization loan. The Brownings soon found that the home that was to be their nest egg was only sinking them further and further into debt.”
“Desperate to get out of their mortgage, the couple concluded that the only option left was to ’short-sell’ their home. The couple put the condo on the market at $100,000 below the value of their mortgage. At the time CityBeat spoke to them, they had two offers on it and reckoned they’d have to move out right around the time their baby was born.”
“Three years after wading into the San Diego real-estate market, the Brownings were leaving it deeply in debt, their credit shredded, their confidence shaken. Unable to afford another property in the Southern California market, the couple was considering leaving the state for Reno, Nev., where Jessica has family.”
“Nonetheless, Jessica remains optimistic about her family’s future—to a point. ‘If we can get into a situation where we don’t have a lot of debt, we’ll be OK,’ she says. ‘But once I start thinking about having bad credit—I’ve never been in a situation like that. I’m just nervous about the unforeseen things popping up and having bad credit.’”
