The ballooning housing crisis: San Jose, Morgan Hill and Gilroy most at risk
posted by Louise Auerhahn
Sunday, December 16, 2007, at 7:43 PM
Thousands of Silicon Valley families have lost their homes to the ongoing housing crisis, with ten of thousands more impacted as the ripple effects of the crisis continue to spread. Sunday's Mercury News mapped out foreclosures in Santa Clara County so far this year, focusing on the hard-hit East Side neighborhoods of San Jose. Unfortunately, the picture of the housing crisis in Silicon Valley is even worse than revealed by foreclosures alone.
A Working Partnerships analysis of houses currently in foreclosure or pre-foreclosure shows where we can expect more families to face losing their homes in the coming months.
San Jose and South County both have reason for concern: in San Jose, 38.7 houses per every 10,000 residents are currently in foreclosure or pre-foreclosure, with an even higher rate of 43.9 per 10,000 in Morgan Hill and a shocking 62.3 per 10,000 in Gilroy. (Los Altos, on the other hand, is getting along fine with just 3.6 per 10,000.)
Not everyone who's currently in pre-foreclosure (those who, after one or more payments, have received a Notice of Default on their loan) will ultimately have their home foreclosed upon. Some will be able to sell and pay off the mortgage, work out a deal to give up the house without a formal foreclosure, or in the best case scenario, find the money to bring the mortgage current and keep their house. But unless they get help, all of the homeowners currently in pre-foreclosure will be struggling to pay their bills and save their homes.
And the problem won't end there; the biggest wave of ARM (Adjustable Rate Mortgage) rate resets is projected to continue through the end of 2008 and possibly the first half of 2009, sparking still more foreclosures.
Given how many American families have been or will be impacted by the housing crisis, President Bush's proposal for selective, voluntary rate freezes by lenders is wholly inadequate to the scope of the problem. The Federal Reserve's proposal today looks like it may help to curb some of the worst abuses (something the Fed should have stepped forward to do a long time ago), but also does not adequately tackle the big picture. We need to help those currently affected, fix the laws and practices that encouraged irresponsible or predatory mortgage loans, and make homeownership affordable for working families. The Center for Responsible Lending discusses proposals that could help embattled homeowners and help prevent this crisis from recurring.
On a local scale, homeowners who need help can contact Neighborhood Housing Services Silicon Valley, Project Sentinel, or ACORN Housing.
A Working Partnerships analysis of houses currently in foreclosure or pre-foreclosure shows where we can expect more families to face losing their homes in the coming months.
San Jose and South County both have reason for concern: in San Jose, 38.7 houses per every 10,000 residents are currently in foreclosure or pre-foreclosure, with an even higher rate of 43.9 per 10,000 in Morgan Hill and a shocking 62.3 per 10,000 in Gilroy. (Los Altos, on the other hand, is getting along fine with just 3.6 per 10,000.)
Not everyone who's currently in pre-foreclosure (those who, after one or more payments, have received a Notice of Default on their loan) will ultimately have their home foreclosed upon. Some will be able to sell and pay off the mortgage, work out a deal to give up the house without a formal foreclosure, or in the best case scenario, find the money to bring the mortgage current and keep their house. But unless they get help, all of the homeowners currently in pre-foreclosure will be struggling to pay their bills and save their homes.
And the problem won't end there; the biggest wave of ARM (Adjustable Rate Mortgage) rate resets is projected to continue through the end of 2008 and possibly the first half of 2009, sparking still more foreclosures.
Given how many American families have been or will be impacted by the housing crisis, President Bush's proposal for selective, voluntary rate freezes by lenders is wholly inadequate to the scope of the problem. The Federal Reserve's proposal today looks like it may help to curb some of the worst abuses (something the Fed should have stepped forward to do a long time ago), but also does not adequately tackle the big picture. We need to help those currently affected, fix the laws and practices that encouraged irresponsible or predatory mortgage loans, and make homeownership affordable for working families. The Center for Responsible Lending discusses proposals that could help embattled homeowners and help prevent this crisis from recurring.
On a local scale, homeowners who need help can contact Neighborhood Housing Services Silicon Valley, Project Sentinel, or ACORN Housing.
(Thanks to Brian Darrow for the map.)
Labels: cost of living, foreclosures, housing
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