As other states adopt stricter regulations on subprime lending practices, California has not rushed to restrict an industry that spent $17.9 million in campaign contributions and on lobbying in the state during the past four years.Why? Because without access to easy credit there is no way that our ludicrous housing prices can be sustained.
Saturday, May 26, 2007
California to FBs: Foreclose, See If We Care
So sayeth the SF Chronicle:
Subscribe to:
Post Comments (Atom)
6 comments:
The brighter side of the housing bubble:
It encourages homeowners to find creative ways to express their frustration.
Marinite:
Thanks for the new post!
The SF Chronicle ran an article a couple of weeks ago that the Bay Area doesn't even have a subprime problem. We all make so much money here, that there are only a few subprime loans and they are mostly in the East Bay/Contra Costa. Certainly none of those loans in Marin -);
The same article said NOTHING about Alt A, which is probably the vast majority of loans over the last few years. That's the next shoe to drop.
But even if CA doesn't clamp down, the lenders are doing it themselves to some degree....we've seen subprime lenders closing their doors, credit scores need to be higher, down payments may now be required (what a concept!), etc.
And, most importantly, once everyone knows someone who knows someone who is financially wrecked for decades because of RE, then no one will want these suicide loans anyway.
The Chronicle misses the point. The point is that a lot of people took out these "suicide" loans because it was the only way to squeeze into a house (which everyone knows is a guaranteed path to riches). Their credit score, which is what determines whether or not a loan is labeled as "sub-prime" (that and the time it takes before the rate rolls over), is immaterial.
"The Chronicle misses the point."
This is the elephant in the room the MSM won't touch. Absolutely, regardless of their credit scores, there are a lot of people in houses they cannot afford once their loan resets.
Subprime blew up first because of the shorter teaser periods (1 or 2 years). But of course the MSM will be shocked and surprised when the Alt A defaults start rolling in.
Marin County is by far lower in subprime loans than any area in the state. In fact, Marin is THE LOWEST of ANY county over 15,000 population.
Marin's rate of only 8% subprime loans compares well to Sonoma County at 20%, Contra Costa at 24%, Los Angeles at 28% or San Bernardino at 40%.
With the new situation relating to jumbo loan rates skyrocketing, I see nothing but severe pain in California. The blood is flowing, Cramer is panicking, and if that is happening there is trouble everywhere. See http://bgamall.stumbleupon.com
Post a Comment