Bakersfield Is Witnessing Excessively High Foreclosure Activities

Posted on August 15th, 2007 by hinson

Bakersfield is having one of the highest cases of foreclosure activities. It has surpassed the average rate of foreclosure of the entire nation. It is one of the top 10 United States that are witnessing foreclosure listings at a shockingly high rate. According to the latest news report by RealtyTrac, one out of every 47 houses is being auctioned due to the inability of the homeowners to pay back their loans. This situation has been prevalent in Bakersfield city of California for the past six months.

Bakersfield is on the eighth position in the foreclosure listings. This in itself is an indication of the terrifying situation that is taking place in the city. Stockton and Sacramento have also made it to the top. From the past few years, people have started resorting to the riskier loan options that provide them with the opportunity to secure loan on easy down payment terms, but later on, the borrowers have to bear the brunt and pay a heavy price for it.

At the initial stage, the borrowers don’t even realize how smart the lenders are. But, gradually, when the rate of interest shoots up drastically within a short span of three years, they have a realization of their helpless situation. By that time, it gets too late to rectify the mistake and the ultimate result is foreclosure activity. The recent reports suggest that, in the previous year, near about 40.3% homeowners in the state of California bought homes by obtaining zero term loans.

The real estate firm RealtyTrac has issued a report, which indicates that near about 10-15 families come up with mortgage problems every week. The real estate agents are befooling the uneducated people and taking advantage of their innocence. They are especially trapping the Latino clients and inducing them to buy houses that they cannot even afford. Bakersfield has even beaten the cities like Phoenix and Los Angeles.

One of the major factors responsible for this dreadful situation is the low level of income. Another reason for the pitiable condition of the homeowners is the lack of job opportunities in California. The housing market of California is overpriced than the common people can afford. In such a situation, the best option that people find is to go in for stated income loans. With such loans, it becomes quite easy for the lenders to evade the examination of wage payments. The rate of interest in such loans is much higher than the traditional prime loans.

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