It looks like California is about to take another _huge_ hit...
It appears that people took out prime rate loans structured similarly to those crazy sub-prime ones we've heard so much about. That is, the borrower doesn't pay much for a few years up front, and then, after a specified time, their monthly payments will _double_
Combine that with a 26% drop in home prices over only the last 12 months...and you're looking at a bunch of people who's houses are worth 3/4 of the size of their loan...and who's paymants are now twice as expensive.
I can't imagine them not defaulting...on purpose...and buying someone's foreclosed house down the street at 3/4's the cost. Sure, their credit might be wrecked...but everyone else's will be too.
If this article is right...we're in for some seriously hard times...
Brace yourselves.
1 comment:
Dude, you gotta pay more attention - this has been clearly brewing in California for more than two years.
Combine this with the impending recession, high energy and food costs, general inflation, and a city, state, and federal tax nightmare, and it makes for quite a mess.
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