California Faces Another Foreclosure Wave

Sitting at the heart of the national housing crisis, the Central Valley in California faces new foreclosure challenges as the prices of basic commodities rise and household incomes contract. This situation is leading experts to believe that the next foreclosure wave is just around the corner.

During the first wave of foreclosure, subprime borrowers and lenders were the ones who got hit the hardest. These lenders were the ones who engaged in unscrupulous lending practices and borrowers who fell victims to these unfair activities.

But the after effects of the initial foreclosure wave will likely reach more borrowers. This time, it targets those homeowners who are struggling with their mortgage payments due to insufficient income.

This is not at all surprising since the state’s high foreclosure rate has primarily resulted to home prices plunging. Millions of homeowners found themselves with reduced equity and for some, their mortgage debts have surpassed the equity they have on their homes. Add the slowing economy and increased cost of living; you will certainly have a recipe for disaster.

Millions of homeowners have no means of getting out of this unfortunate situation. With their tight budget and unaffordable mortgage payments, many have accepted the possibility of losing their houses to foreclosure.

Across the nation, troubled borrowers are seeking assistance from their lenders in refinancing to fixed rate mortgages, which will allow them to enjoy more manageable mortgage payment terms.

There are even non-profit organizations that are lending their expertise to these distressed borrowers in order for them to make informed decisions. After all, foreclosure is a tough process and homeowners should be aware of their rights and what will happen to them after.

As always, foreclosure experts are urging distressed homeowners to work out their mortgage woes with their lenders in order to avoid foreclosure.

To date, California is among the states with the highest foreclosures rate. Compared to July 2007, there was a 119.3 percent increase in pre-foreclosure filings.