The state of California has seen a drastic rise over the past few years in the amount of foreclosures being filed, and subsequently, the amount of new foreclosure listings on the market. Foreclosures are the result of a homeowner’s failure to keep up with payments on their home mortgage loan. Usually in this case, the lender attempts to repossess the property and sell it at auction in order to recollect the amount remaining in debt on the loan.
California foreclosure listings are more abundant than in any other state. Many attribute this to the rise in sub-prime lending over the past few years. Sub-prime loans are a relatively new phenomena which provide loans to people who otherwise would be ineligible to receive them due to bad credit. However, the danger of these loans is that they often carry adjustable interest rates. Now that the interest rate in California and other parts of the country has risen so drastically, homeowners are unable to keep up with the rising payments, leading to foreclosure.
Foreclosed properties however can be very valuable to homebuyers and investors. Often times, they are sold for anywhere from 10 to 50% below their actual value simply to cover the amount owed in debt. Finding foreclosure listings and pursuing these homes in California can be an excellent way to find great savings on real estate. With the current foreclosure situation showing now signs of slowing down, buyers would be wise to take advantage of the opportunity to buy valuable foreclosure real estate in California.
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