Do Rising Repos Signal Declining Markets?

The fire is about to go out in overheated housing markets on both coasts, according to a woman who helps investors locate property owners that can no longer afford their homes.Alexis McGee of Foreclosure.com, Sacramento, Calif., said borrowers who have dipped too deeply into their home equity or are unable to afford higher payments on adjustable-rate mortgages will have trouble keeping their properties if values falter. Speaking at the annual Real Estate Connect technology conference in San Francisco, Ms. McGee said foreclosure activity is already on the upswing. It "will increase further" as rates move upward and prices level out or decline, with the possible exception of the Chicago area, she said. "Inland's okay," Ms. McGee told MortgageWire. "It's the coasts that we're concerned about." Foreclosure.com has been keeping tabs on lender take-backs for a dozen years and publishes proprietary foreclosure lists for 18 California counties, the entire state of New Jersey, and the Phoenix, Las Vegas, Chicago, and New York metropolitan areas. Whether prices will drift to a soft landing or fall off the cliff remains to be seen, Ms. McGee said.