San Diego Foreclosure Bailout Loans: Sub-Prime Still Funding

I don't think many San Diegians have much equity in their home.  Lenders have stripped much of the equity with the repeated refinancing of loans from 1998 -2006.  Most of the equity went to pay off cars, boast, credit cards and the lavish vacations.  Very little of the monies taken from equity went into refurbishing the collateral, in spite of the 1003 stating the loan was for home improvements.

The chickens have finally come home to roost.  Your home is not an investment nor should you employ speculative techniques.  A home can provide an investment return for retirement and the gurus were advising folks to refi and invest the difference.  Bad strategy!

Just the facts: 

California, Florida, Ohio report highest foreclosure totals.  Foreclosure filings were reported on 64,711 California properties in March, the most of any state for the 15th consecutive month. California foreclosure activity increased nearly 21 percent from the previous month and almost 106 percent from March 2007. 

California households received a foreclosure filing in March - 2.7 times the national average.

California Foreclosures By County For April 2008 

San Diego totals are included in the California stats.  If you find a loan originated by Aames, Argent or New Century, you will find little or no equity.  I respect your disagreement, but I've objectively reviewed the data and stand behind the previous comments.  If you assessment is true, it San Diego should be fertile territory for lending as any lender would make a loan with 50% equity in the collateral.

I understand many in the business (especially those new to the business) want to put a positive spin on a very serious matter, but the facts are the facts irrespectively of how you choose to slice it.  If I had never had firsthand insight and worked in the industry as a underwriter, I probably would not be making these revelations.   Many many loans were originated that provided no benefit to the borrower.  Your firm may have been above board and dealt honestly with borrowers, but many many more did not and were only in it for the fees.  I can also speak form the perspective of an originator as I competed for loans.

I underwrote many of those loans and know we did them as 80/20 piggies to borrowers without the financial savvy and wherewithal to make sound investment choices (Hell they could not keep their credit clean with FICOs from 525 - 630); plus the HUD 1 had most of the funds going to pay off creditors, especially credit card companies. 

Yes the old money is well off and protected, but much of the newly acquired appreciation was stripped with repeated refinancing.  I would be well off if I had $1 for every loan that I saw with origination fees above $10,000 at closing.

A spade is a spade and not a club with squiggly lines.

If you use the "pick a payment loan" and pay the minimum with the idea of investing the difference and don't follow that strategy religiously, for whatever reason, your property (home) has a high likelihood of becoming a foreclosure especially if any of the 3 D's occur in your life.

The question becomes was it the 3 D's that caused the foreclosure or the initial decision to pull the equity in the first place and follow an investment strategy that requires discipline.

The rain will come and the winds will blow, will your house of cards stand death, disability, or divorce

See Realty Trac U.S. Map Link Below with Households per Property with Some Type of Foreclosure Activity:  http://www.realtytrac.com/blog/photos/foreclosurepulse_photos/images/46981/original.aspx 

Much love to you!  Little confused on how you use liquidity and equity in the same sentence.  Over the past 25 years, I've also developed a reputation as a broker know for helping families acquire properties, finance homes and most importantly keep their homes.  I've had my hands in many cookie jars since coming into this business in 1982.

I was still offering conventional Fannie loans until the market values exceed the loan limits in my area.  This business has afforded me many wonderful opportunities to help folk and I continue to do so.  

I made a personal oath to always maintain integrity and deal fairly with each client and not become a prostitute to a commission.  Hey, it worked! 

Good luck to you and I've enjoyed your conversation.  I'm sure you also serve this industry well.

Brian - You market yourself as America's #1 Mortgage Broker!  However, the DRE website don't have a record of you holding a Broker's license.  Is there an accident or is this real? 

I thought in the fairness of full disclosure you would have to be first licensed as a broker to be declared as America's #1 Mortgage Broker.  Being licensed under a CFL license I think you would agree is not the same as being a Broker.

http://www2.dre.ca.gov/PublicASP/pplinfo.asp?start=1 

Maybe I'm reading too much into this!  It is apparent you have a knowledge of mortgage lending, but I'm left confused.

Funny, when I've made bad investments, I never cried about it, or asked for help.  Why is it suddenly ok to assist everyone who got in over their head?  Tax breaks, will that create new revenue?  I support providing free moving trucks to anyone who wants to return to Mexico, and taxing the heck out of the ultra-rich.  Anyone who needs a job should enlist in the military, or quite complaining about being unemployed.  There, cross that out too.