Foreclosure Market Realities and What’s Ahead for San Mateo

Foreclosures Will Always Be a Reality

The prevalence of the “6 Dreaded D’s” – death, divorce, disease, drugs, denial and da job – ensure that foreclosure will always be an element in the lender/borrower relationship.  Foreclosure is a consequence of real people in distress experiencing one of life’s brutal low points.  For the home owner, it never feels like a good choice and often foster feelings of failure.

What Good Does it Do to Post Notice of Defaults in the Newspaper?

Foreclosures – Notice of Default and Notice of Trustee Sale – are recorded and posted for all the public to see at the County Recorder’s Office.  Does any good result in these postings?  I think not.  The borrower knows he or she is in default and can lose their home.  The lender knows since it is the lender who initiated the foreclosure process.  Why should every nosy neighbor, scam artist and hustler have this information readily available to exploit those desperate for hope?

Affordability is More Critical than Appreciation

These people who often say they would rather drop dead than lose their home are truly desperate.  Much of their distress is self-inflicted and compounded by denial to be sure.  It seems that regardless of how long the borrower has been in foreclosure, they are always broke.  If more people would understand that affordability is more critical than appreciation maybe the rate of foreclosures would decline.

Foreclosure Affects Everyone – Rich and Poor

Foreclosure affects the rich and famous as well as the invisible poor.  Foreclosures occur in good neighborhoods and bad ones, in times of economic boom and bust too!  For home owners a short sale is preferable over a foreclosure which is much less damaging than a bankruptcy.   Still recent surveys have shown that almost half of the loan modifications completed 12 or more months ago are already in arrears.  Go figure.

What’s Ahead for San Mateo Real Estate? More Foreclosures!

It’s likely that we will see more foreclosures coming.  A 2nd wave of Adjustable Rate Mortgages (ARM) are scheduled to re-set or re-cast beginning about May, 2010, and a 3rd wave is scheduled for early 2011.  Surely, many of these borrowers unable to make their new, higher mortgage payment will fall into foreclosure.  If home values continue to fall, short sales will become more prevalent.

Tune in next time to learn how markets are affected by foreclosures.

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Raymond Stoklosa, Chela Stoklosa and Rebecca Williamson are Realtors with The RayChel Realty Group specializing in Santa Clara and San Mateo Real Estate.