Foreclosures are a painful reality in Bay Area as increasing numbers of homeowners are in danger of losing their homes. These people are finding themselves unable to pay their home mortgages or sell for enough money to cover their loans. Nearly 3,000 homeowners in the nine-county Bay Area got default notices from their mortgage lenders in the April-through-June period.
According to experts, rising interest rates are one of the main causes of the growth in foreclosure. Most homeowners have some kind of debt, usually home equity lines of credit or credit card debts. And now, since the interest rates on home equity lines have risen sharply, homeowners are feeling the pinch. The prime rate -- which governs the rates on most equity loans -- is up to 8.25 percent. Mercurynews.com reports:
Californians currently have an outstanding balance of nearly $79 billion on their home equity lines of credit, according to Loan Performance, a San Francisco company that tracks loan data for the mortgage industry. Homeowners in the San Jose metro area have about $5.1 billion worth of debt on their home equity credit lines.
Read more: Bay Area foreclosures spike; still near historic lows
Comments