California Foreclosures up 200% from Last Year

Click stars to vote (left is low, right is high)

(1 votes, average: 5 out of 5)

 Loading ...

[?]
 Print This

RISMEDIA, September 10, 2007–The 2nd Quarter National Delinquency Survey, released recently by the Mortgage Bankers Association (MBA), shows that California mortgage loans entering foreclosure have reached 25-year highs, with subprime borrowers bearing the brunt of the storm.The MBA linked market factors such as declining home prices and an increase in housing inventory to the grim foreclosure situation in California, but failed to acknowledge the risky products and deterioration of lending practices in their own industry. “Brokers and lenders pushed risky products that maximized their profits, but lost sight of the basic fundamentals of lending,” said Paul Leonard, director of the California office of the Center for Responsible Lending. “Subprime borrowers were set up for historic levels of failure.”

While foreclosures on all types of loans have increased in the Golden State, foreclosures in the subprime market are especially severe. CRL analysis of the MBA report shows that the second quarter subprime foreclosure rate is the highest-ever in 25 years, topping the most recent record quarter, which was the first quarter of 2007. MBA’s data also show that foreclosures — both for all loans and subprime loans — increased about 200% over last year.

Unlike other states, California has not acted to stem the foreclosures or tighten safeguards for borrowers. “It’s time for California’s elected leadership to act to reduce the foreclosures and the economic declines that are sure to follow,” Leonard said. In response to the record level of foreclosures facing California homeowners, it is imperative that California works immediately to provide assistance to borrowers in crisis and enact legislation or regulation that will protect consumers in the future. Specific recommendations include:

– Providing emergency funding for housing counselors and attorneys to
assist borrowers in negotiating more favorable mortgage terms;

– Collecting data to track lender’s efforts to avoid foreclosures and
establishing long-term affordable mortgages for borrowers;

– Establishing lending standards where borrowers are qualified based on
the fully-indexed interest rate, verified income, reasonable debt-to
income assumptions and mandatory impoundment accounts for property
taxes and insurance; and

– Banning subprime prepayment penalties, which lock subprime borrowers
into the subprime market.

Last December, the Center released comprehensive research on the performance of the subprime market that projects 2.2 million homeowners with a subprime loan will lose their homes to foreclosure nationwide, with California representing approximately 460,000 of those losses.

That study, “Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners,” is available at http://www.responsiblelending.org/.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Discussion Forum

Topic	Posts	Last Poster
Is Social Media Marketing Effective in Real Estate Industry?	3	katescape
The importance of Local.com to real estate agents	1	HItxt101
NEED AGENTS / & REFERRALS	45	DainaBurness
Ethical values in real estate business	2	ballyhoo
MLS exposure without paying the commissions!!	5	uniquepam
Ethics	2	garyfrimann
3 Point Digital Marketing Strategy and the Importance of the ‘Assist’	1	HItxt101
35% Referrals to Valley of the Sun - Arizona	1	k4homes
Inexpensive Real Estate Websites	5	ncarey
RisMedia Forum - What a Response!!!	1	mycondospot

Learn 5 Vital Concepts to becoming a Master at Online Marketing at Leadership Conference

RISMEDIA, August 29, 2008-In today’s technology driven world, online marketing is just one factor in the key to success. Many agents believe that having a website and subscribing to the lead generation school of thought is enough, but as most agents can attest, nothing’s happening.
Renwick Congdon, President & CEO, Imprev will facilitate the “5 Concepts […]