Saturday, December 15, 2007

Investors and gamblers one of the main reasons for foreclosures in Bay Area

One fifth of San Francisco's foreclosures are owned by investors

Interesting article by sfgate:

Israel Medina admits he got too gung ho about the idea of getting rich by flipping Bay Area real estate.

Medina, a Concord resident who ran a limousine company before wading neck-deep into the housing market, has seen not one, but 11, of his Northern California properties move into foreclosure in the past year, he said.

"I was a real estate tycoon; I had everything," said Medina. "Now I have nothing."

A Chronicle analysis of public records shows that speculators like Medina played a significant role in the region's subprime loan meltdown.

These real estate gamblers are hardly the struggling home buyers often portrayed as victims of the Bay Area's and nation's foreclosure crisis. Some bought houses as often as other people buy shoes, rarely putting down any money. The speculators were betting that home prices would continue to shoot up. Instead, when the market started softening and prices sagged, many of their properties ended up as foreclosures.

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