Southern California continues to experience the impact of foreclosures with more and more abandoned and vacant properties being added on the region’s repo homes listings.
One area in the region that could really represent the real impact of growing repo homes listings is the Lake Elsinore wherein three out of four homeowners have properties that are less than the total mortgage they owed.
According to data gathered from the Riverside County assessor’s office, repossessed homes accounted for every five properties in the area since January 2007.
Meanwhile, at the North San Diego County, the foreclosure capital is Escondido with 1 homeowner out of 22 facing the threat of foreclosures since January 2007. Furthermore, banks were able to foreclose 1 per 5 houses during the same period.
A report by the First American Corelogic predicted more foreclosures in the region as many troubled borrowers owe more mortgages that the total market value of their properties.
The increase in the number of foreclosed homes in Lake Elsinore is attributed to the rise in new home construction and their subsequent sale to borrowers who did not have the means to pay their monthly mortgages and keep their account current.
According to county and census data, delinquent homeowners tripled their numbers to 4,648 from 1,420 from 2000 to 2008. Meanwhile, construction of planned communities along the Cottonwood Canyon area has stopped as developers struggle to maintain competition with banks in selling foreclosure properties for almost 50 percent less from the peak price established in 2005.
Meanwhile, industry experts concluded that the housing crisis in the Lake Elsinore area would continue to intensify if things would not change to help troubled borrowers remain on their houses and avoid distressed properties.
Industry analysts pointed out that subprime loans’ rate adjustments which featured low introductory payments that eventually went up was the main cause of the first wave of foreclosure crisis which started in 2007.
The unabated foreclosures have earned the city an unwelcome nationwide attention. “GQ,” a men’s fashion magazine, described Lake Elsinore as the loneliest city on the world. The city also came into the attention of the media when two wild bobcats took over a repossessed property in Tuscany Hills.
In April, about 188 houses were sold in Lake Elsinore, while an estimated 387 homes were placed on repo homes listings.
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