Industry News

Real estate loan foreclosures flat

Investment advisor expects rising defaults as rates rise

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Foreclosures in California remained flat in 2004 compared with 2003 levels, according to, a northern California investment advisory firm specializing in distressed property. "Of the eighteen counties we cover," said president Alexis McGee, "only three posted increases – Riverside, San Joaquin, and Stanislaus – while the rest of the counties showed essentially the same numbers of defaults or modest declines from 2003." McGee added that while fixed rate mortgages remained near historic lows, adjustable rate mortgages were a cause for concern in part because of the ongoing short-term rate increases from the Federal Reserve Bank. "Adjustable rate mortgages move in lockstep with the Fed's discount rate," she pointed out. "And the use of adjustable rate loans has reached very high levels as buyers turn to them to qualify for sky-high California home prices." She said that recent data indicates that as many as 80 percent of home buyers in se...