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California Credit Card Debt Consolidation San Diego

Home foreclosure scandal results from abusive California debt consolidation loans to consumers

San Diego, California, June 1, 2007 – Are you a California homeowner that is burdened with uncontrollable Debt? You’re not alone! Adding to California ’s high living and housing costs and unbearable income taxes, credit and high interest rates have many California homeowners seriously drowning in debt. to quell The growing financial dilemma of uncontrollable Debt, many California consumers are resorting to debt consolidation .

for many Californians, The practice of debt consolidation has been typically achieved by getting a “debt consolidation ” loan against The equity on their homes, otherwise known as a “home equity loan.” A home equity loan could be a smart choice for a variety of financial circumstances. It could allow you to consolidate medical debt, student loans, and high-interest credit card balances, or to refinance your mortgage and get cash out for needed home improvements. It could also give you a lower interest rate and lower monthly payment. This benefit will certainly make it easier for you to manage your finances and pay your bills each month. But on The other hand, a California Debt consolidation loan could put your home at serious risk!

Despite being able to help you to reduce steep interest rates, keep in mind that a home equity loan is a “secured” mortgage loan that is collateralized against The equity on your home. This is The spare capital after The current market value of your home minus The outstanding principal mortgage balance. Because your home equity guarantees The repayment of a debt consolidation loan, if you default on any loan payment, The mortgage lender will quickly foreclose and repossess your home to satisfy payment of The outstanding loan balance.

Besides The negative “security interest” of a home equity debt consolidation loan, you mustalso beware of predatory subprime mortgage lenders that have given high-risk debt consolidation loans with increasingly high-risk loan options and incentives have victimized many California homeowners. Because of them, The California housing market has experienced insurmountable Debt consolidation loan defaults and subsequent record home foreclosures.

A prime example of loans utilized by predatory mortgage lending is The “interest-only” adjustable-rate mortgage (ARM) loan, which allows The borrower that needs consolidate Debt to pay only interest and avoid paying down any principal during The initial loan period. Seeing people falling behind on their mortgage payments, debt consolidation companies have enticed them with “interest only” loans that offer to save them from foreclosure by refinancing their mortgages with lower monthly payments. But prior to taking The loans, The borrowers were unaware of hidden loan terms that caused them to repay only The interest each month. Thus, at The end of The loan term, a balloon payment was causing borrowers to pay The entire principal balance or face eviction from their homes.

One of The most blatant California debt consolidation lending schemes has been The use of “payment option " loans.This type of loan causes borrowers to pay a variable interest rate based on unpaid interest being added to The loan principal. many "teaser" rate debt consolidation loans feature an initial rate below 4%. But after The initial loan period, The interest substantially increases. People that have taken these loans have seen their monthly payments nearly double and inevitably, many borrowers have been forced into foreclosure.

Also prevalent in The California debt consolidation marketplace has been The abusive lending practice of “equity-stripping.” Seeing income-challenged homeowners had equity in their homes, unscrupulous lenders persuaded them to take out debt consolidation loans despite their financial challenges and inability to keep up with existing monthly payments. Some lenders even caused some of these homeowners to falsify their income on loan applications to get debt consolidation loans approved. But as soon as they couldn’t keep up with The debt consolidation loan’s monthly payment, The lenders quickly foreclosed on their homes and slyly stole any remaining equity that The homeowners had invested in their homes.

Lax lending has also flooded The California housing market and has been a primary contributor to The state’s foreclosure problem. Looking for huge profits, California mortgage lenders have carelessly issued debt consolidation loans to literally any borrower despite having a questionable credit history. Ata record pace, subprime lenders were approving higher risk debt consolidation loans to credit-challenged borrowers based on The increased value of The borrowers’ homes, banking on a high return on investment-and The assumption that housing prices would continue to appreciate. What proved to be a false premise eventually enticed many borrowers to take out much higher loan amounts than what they originally intended. But as The economy tightened with decreasing housing prices, The variable interest rates on most California debt consolidation loans spiked. The unbelievable mortgage increaseshave caused many monthly payment weary California homeowners to be stuck with unaffordable Debt consolidation ARM loans. Another terrible contributor have been dwindling housing prices that have made refinancing options much more difficult to find even for a borrower with a good credit history.

As of March 2007, The catastrophic California Debt consolidation lending schemes have created massive home equity loan defaults and unprecedented unemployment. This end has forced many mortgage lenders out of business and several large mortgage lenders, such as Century Financial into bankruptcy. Yet by far, The victim of The subprime mortgage lending fiasco that has been impacted The most is The California homeowner. This has placed hundreds of thousands of Californians in imminent foreclosure, fractionally The largest group of an estimated two million U.S. homeowners that will lose their homes by 2008.

California ’s home foreclosure statistics are staggering with 7 of The top 25 foreclosure rates being in California cities. in The third quarter of 2007, after Nevada (with 1 for every 61 household foreclosures), California recorded The second-highest foreclosure rate more than tripling 2006 figures with 1 filing for every 88 households. in northern California, The city of Stockton had The highest foreclosure rate in The country. Stockton had an estimated foreclosure for every 31 homes. Riverside and San Bernardinoranked a close third while Sacramento ranked sixth, Bakersfield, ninth, and Oakland, 10th.

Home equity borrowing has been significantly devastating to many California homeowners. Thus, if you are considering a home equity loan to consolidate your debt, you mustexercise caution or you could end up losing your home and greatest asset. You should only consider getting a California debt consolidation loan after you’ve done careful research. Here are some valuable tips:

  • NEVER take out a California debt consolidation loan that depletes all of The hard-earnedequity you invested in your home.
  • NEVER let The offer of extra cash or a lower monthly payment impair your judgment-into getting a California debt consolidation loan
  • DON’T get The loan if your income cannot bear The monthly payments or potential future monthly payment increases.
  • ONLY sign loan documents that you have read and understand .
  • NEVER be pressured to sign any document-, or be deceived into signing blank documents.
  • ALWAYS be aware of all loan terms, clauses, and conditions of your California debt consolidation loan agreement-.

in closing, ensure to protect yourself and your property at all times against abusive lenders . Remember, before you get a debt consolidation loan, when in doubt, seek legal or professional advice. Plus Debt Settlement is another alternative to consider in getting you out of The debt trap. A great Debt Settlement company is Debt Free League. in lieu of a California debt consolidation loan, their unique Debt Liquidation Program can help you reduce your total debt affordably and can produce a savings of up to 70% on your debt’s principal and interest.

About Debt Free League
Debt Free League is a Debt Settlement organization that works on behalf of consumers and small businesses to negotiate The settlement of unsecured debt. Working through key relationships with creditors, collection agencies, and collection attorneys throughout The country, their Debt Liquidation Program has produced substantial unsecured debt reductions and a variety of credit improvement-benefits for many clients.

for more information, Contact Debt Free League’s Web site at

(800) 213-9968


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