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(EMAILWIRE.COM, March 08, 2007 ) SACRAMENTO, CA — Homeowners, especially those with adjustable rate mortgages, throughout the Sacramento region are having difficulty making mortgage payments and their problems are now affecting the lenders who made them loans. Folsom, California, just outside of Sacramento, recently lost a long-term player in the residential lending market, Central Pacific Mortgage.The company, which was founded in 1977, recently closed and, according to the Department of Corporations, may surrender its license soon. The problems that beset the firm are not fully known, but many lenders like Central Pacific across the nation are required to repurchase the loans they made and later sold to investors if the borrowers default.Regulators across the nation are increasing their level of scrutiny of lending practices to try to stabilize the nation’s residential housing markets. Borrowers during the first half of this decade were enticed to buy ever more expensive homes by borrowing money at low initial rates that would later reset to much higher payments. This phenomenon was common and many, many lenders abandoned conservative lending guidelines in order to fulfill demand from consumers.Experts say that many of these consumers lied on their loans. One commentator and foreclosure expert, Patrick McGilvray, J.D., President of http://www.TheHomeBuyingCenter.com, had this to say, “lenders and consumers alike, especially in the Sacramento are, were bitten by the greed bug during the recent real estate boom and this negatively affected their judgment. I’ve read studies that indicate that up to 90% of borrowers in the past several years on so-called stated-income loans lied about their income.”These ‘stated-income’ loans afforded many borrowers to purchase homes that rose in value at double-digit levels for almost five years in a row. Fearing that they might never be able to purchase a home in their area, many felt that they could not pass up an opportunity to get a loan, even if they did not understand what would happen to their payments after an initial time period.This readjustment of payments, sometimes by 40% or more, has caused many borrowers to quit making payments, and many homes are entering the foreclosure process nationwide. Some lenders who specialized in riskier home loans, so-called subprime lenders, are closing their doors and others are seeing their stock prices battered in the stock markets.Patrick McGilvray, J.D.Tel: 916-920-3278 Patrick@thehomebuyingcenter.com http://www.thehomebuyingcenter.com
Patrick McGilvray, J.D.
Patrick McGilvray, J.D.
Patrick@thehomebuyingcenter.com 
Source: EmailWire.com
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