How Project Lifeline Will Help

Project Lifeline has to be a good thing for everyone in Riverside County.

It's got to be fantastic news for the thousands of homeowners who are facing foreclosure. Project Lifeline, a program announced Feb. 12 by major banks and lending institutions, is going to give them an extra 30 days to work things out. I hope that's long enough for them to either negotiate a new deal with their lender, refinance or sell. I know firsthand from my own foreclosure back in the 1990s how a little more time could have helped.

It will also help the rest of us homeowners who at some point may need to sell their homes, refinance or borrow against their home equity, which is either non-existent or rapidly diminishing. We have suffered the brunt of the mortgage crisis to such an extent some call our county "The Foreclosure Capitol of the World." With so many people defaulting on their loans, its throwing home values down in just about every community around here.

"Foreclosure activity is closely tied to a decline in home values," said Marshall Prentice, president of DataQuick Information Systems, a real estate information service based in La Jolla. "With today's depreciation, an increasing number of homeowners find themselves owing more on a property than it's market value, setting the stage for default if there is mortgage payment shock, a job loss or the owner needs to move."

Countywide, statistics from Data Quick show that our homes lost 18 percent of their value from the last quarter of 2006 (when I bought mine) to the last quarter of 2007. That's skewed somewhat by the fact that home prices are still rising in most of the desert communities. In most places they're still dropping, and in many communities by more than 20 percent. In Nuevo, they dropped by more than 40 percent.

Throughout California, Data Quick statistics show that 81,550 homeowners received default notices between October and December of last year. That's more than double the number issued in the last three months of 2006 and the highest number ever since DataQuick started keeping track in 1992.

Since our communities were among the fastest-growing in the state, and many new residents had the troublesome Adjustable Rate Mortgages, a lot of those foreclosures were here in Riverside County. Drive around any neighborhood, especially those in or near Perris and Nuevo, and you will see.

Helping people keep their homes will help everyone by improving the economy. When a lending institution forecloses a house, it loses income. It then has to lay off employees, who cope with their own loss of income by not spending very much. Since I'm also unemployed, I meet regularly with a group of about 130 Riverside County residents who are looking for work. About half of these people formerly worked for the savings and loan industry.

Here on Avenue Juan Diaz, one of my new neighbors picked up a condo just like mine, but for $58,000 less than I did. I'm not planning on selling my condo anytime soon, provided my husband and I can either keep up the payments on one income (plus change from my freelance writing gigs). And as far as I know Wachovia isn't planning on raising our payments anytime soon. But it's nice to know someone will throw us a lifeline if we need it.

Resources:

www.HopeNow.us

www.dqnews.com

www.pe.com/classifieds/realestate/homesales