OK, I'm usually pretty even keeled, but after reading an article in the Sunday Orange County Register, I'm pretty disturbed.
Street of Broken Dreams is the name of the article. Long story short: 14 of the homes on 2 blocks are in some state of foreclosure. 75.6 percent of the purchase loans for 2005 (last full year reported as of now) were issued by subprime lenders.
For Orange county, the Center for Responsible Lending estimates that 23 percent of the subprime mortgages made will end in foreclosure. That is 2500 of the 11000 homes bought with subprime money in 2006 in this county. I can tell you that they are typically conservative with their numbers which terrifies me even more.
If you insist, that first time hombuyers attend some form of counseling before buying the home, or you will not extend financing, does that create a bottleneck of buyers, or does it really help you as a consumer better understand before buying?
Less than 50% were US Citizens? I am Hispanic, so I know this is risky territory, but are we missing something that we should be looking at?
The median household income was less than half of the county median. Should the lender be required to monitor this the same way incentives are provided for lending in Low Income Census Tracts or Low to Moderate Income Borrowers?
Like capital gains that allow exemptions 2 out of every 5 years, should there be a limit for # of times allowed to refinance without proving the reason why the money is necessary?
Moving forward, should the American Dream of Homeownership be so easy to attain?
I guess this is the bucket of ice water I needed thrown in my face that has made me realize that there really are no easy answers, but a whole lot of heartbreak for the families involved, as well as those that are not, who happen to live in the areas that are being affected. While I clearly understand there are no easy answers, as a real estate professional, I imagine I will work even harder at educating the masses knowing that there are unethical people out there that only care about getting paid, regardless of who gets hurt in the process.
I've never been one of those, and after reading this story in the OC Register, I intend to make sure I get them OUT of our industry. I hope that my peers will do the same in their respective communities across the US so we can mitigate this issue with as little pain and suffering as possible.
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