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WORLD / America
Welcome to Stockton: foreclosure capital USA
(Agencies)
Updated: 2007-09-17 10:31
STOCKTON - A town in central California has become ground zero in the
wave of foreclosures plaguing the US housing market in the wake of the
sub-prime lending crisis.
A foreclosure sign sits in front of a home in March 2007 in Miami.
Stockton, a town in central California has become ground zero in the wave
of foreclosures plaguing the US housing market in the wake of the
sub-prime lending crisis. [AFP]?
With a population of nearly 300,000, Stockton has acquired the
unfortunate distinction of having the highest foreclosure rate of any US
city, with one in 27 households left counting the cost of the credit
crunch, according to Realtytrac, an online marketplace for foreclosure
sales.
Stockton's Weston Ranch neighborhood, a 15-year-old subdivision of modest
tract homes, has the worst foreclosure rate in the area, according to
ACORN, a national advocacy group for low and moderate-income families.
"It's not the CEO of Intel who lives in Weston Ranch, but the guy who
details his car," Geri Taylor, broker at Weston Ranch Realty for twelve
years told AFP. "They just were not prepared for this."
Adjustable rate mortgages offered to sub-prime borrowers, hopeful
homeowners with shaky credit, lured families into houses with inflated
prices, said Taylor.
"Many financed one hundred percent of the price, and some even financed
the closing costs," she said. "They got in at a teaser rate thinking this
neighborhood would be commutable and affordable, and then the rates went
up."
Sign-after-sign beckon to potential buyers on the Weston Ranch streets.
"American Dream Realty - Reduced Price!" reads one placard spiked into a
brown lawn.
"People are just walking away," said Taylor. "We've seen houses with food
still on the table from when the sheriffs have come knocking."
Lupe Dominguez washed his car in his driveway two doors down from a
shabby bungalow with a front window covered in a yellow and black poster
announcing a public auction with a fifty thousand dollar starting bid.
"That house has been empty for nine months or so and the sign has been
there for two," he said.
A friend who lived down the street lost his house to foreclosure and then
rented a house that he had to vacate because it too was foreclosed, he
said.
Gloria Johnson, another broker in the Weston Ranch area, has increased
her volume of "short sales," as a method to help homeowners avoid
foreclosure and wrecked credit.
In this arrangement, the borrower provides evidence of financial hardship
and the lender agrees to assume a loss and sell the house below the
amount owed on the mortgage.
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