Are people walking away from their homes in Humboldt County?
I touched on this in my roundup below. In the past week, the SF Chronicle and the Sac Bee have published staff-written stories about homeowners who are walking away from their mortgages. They are turning in their keys and ceding their deeds to their lenders, rather than suffer through foreclosure. Most of these people are the borrowers who got the types of loans that is now causing a financial crisis. They speculated, as did their lenders, that their homes would rise in value. But after the bottom fell out, they are over their heads with loans they can't possibly pay off; they owe more than their homes are worth.
I wonder if this is happening in Humboldt County.
Also, does the Bear Stearns meltdown have any bearing on the financial health of Eureka-based Security National? Neither company is a bank that makes home loans (Bear Stearns is an investment bank), but both companies invest in home mortgages or securities tied to home mortgages.
Comments
I'm putting my houe up for sale because Humboldt County doesn't support my skill set. I have lived here for over a quarter of a century, raised two children and own my house outright and I'm going under from a lack of income. No industry. No ART. And, frankly, very little hope.
Posted by: Avery | March 16, 2008 09:49 AM
Sorry to hear that, Avery. I can relate to how difficult it is to find industry that supports a particular skill set behind the Redwood Curtain. Good luck, wherever you end up.
Posted by: Andrew Bird | March 16, 2008 10:38 AM
I do see this happening in Humboldt County. We know a few couples who bought houses on property they only imagined would appreciate rather than the opposite. One such couple is now selling their house at least $50K under what they originally paid. We also purchased during this high market and are now faced with the fact that we more than likely owe more than our home's value. Thankfully, we can still afford it and hope that things will change. It's truly sad and I don't really see and end in sight.
Posted by: Sandi | March 16, 2008 05:18 PM
I hope your friends are able ride out this market.
Buying a house to serve as your home for the long-term is never a bad investment as eventually its value will increase.
Those who are hurting the most are people who speculated by taking out loans they could never hope to manage without a sharp increase in the value of their homes in a short period of time.
Posted by: Andrew Bird | March 16, 2008 07:31 PM
I have heard rumors from the inside that SN has taken a financial hit due to the home price/mortgage loan meltdown. If you are in the business of buying "distressed" debt, then in a market where such assets have been losing value unexpectedly and precipitously, it is likely that you will have paid too high a price for such loans. With so many people under water (i.e., mortgage debt exceeding the market value of the home), it is likely that a chunk of SN's portfolio is also under water.
I haven't heard of too many people walking away from their homes up here. I also don't know if there was as much speculative investment. After all, one can wait out the downturn by growing weed .... Sigh.
Posted by: Steve | March 19, 2008 11:31 AM