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Riverside investor Bruce Norris, founder of the Norris Group, sees dark days ahead.
He just released “California Crash,” a report full of 407 looseleaf pages of heavy stuff. (It weighs 5 pounds, 8 ounces, according to our mailroom scale, and cost $997, according to his Web site.)
Norris predicts that California will see a 1,500 percent in foreclosure activity by 2010. (Newspaper articles and his press kit credit him with predicting the market boom that started in 1997.)
He notes that $1.5 trillion in adjustable loans will do just that upward between now and next year.
“California has a much higher proportion of adjustables,” he said.
And buyers who refinanced over and over to take advantage of what once were sinking interest rates could find themselves in a bind.
So could late-comers to the market who bought with interest-only loans and are in for a surprise if interest rates keep rising.
And Norris maintains it won’t take a lot of stretched mortgage holders to start some bad stuff rolling downhill.
“You don’t have to have more than 2 percent of owners to create a tremendous problem,” he said, “and send foreclosures rising.”
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