More homeowners struggle with mortgages they can’t afford
Sarah Portales wants to keep paying her mortgage on time, but she’s got a problem. Her monthly payments are $3,500 and her income is slightly less than that. All the efforts this San Jose custodial supervisor has made to find a way to refinance her loan into something she can afford have so far led nowhere.
Portales is the face of a problem that is troubling the real estate market in San Jose and across the country: As the residential market flattens and lending standards grow tougher, thousands of subprime borrowers are confronting mortgages they can’t afford, with few options to refinance into new loans. Mortgage delinquency and foreclosure rates have surged.
On a comparative basis, Santa Clara County still has relatively low rates of delinquency and foreclosure compared with California’s Central Valley and other hard-hit areas. Data shows that most of the local mortgage delinquencies are found in lower-income neighborhoods.