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After a dozen people spoke to the devastating effects of foreclosures in the region in Thursday’s meeting of the City-County Reinvestment Task Force, one San Diego man told his own story. Andy Sobel said he’s facing foreclosure on his east San Diego condo, which he financed 100 percent in July 2004. He said unsound lending practices landed him in that spot, and sighs from housing counselors illustrated their statements that they’re hearing from 10 such homeowners a week.
San Diego City Councilman Tony Young led the meeting Thursday to discuss the effects of increasing foreclosures in the region. The topic drew a crowd of city and county officials, mortgage professionals and housing counselors. (I wrote about some of those issues last week — you can read that story here.)
Consultant Steve Bouton made a presentation focused on the predominance of the now-famous subprime loans in communities with high minority populations, and also those with low to moderate average incomes. Public comment featured major players from the region’s housing agencies, like Gabe del Rio from Community HousingWorks and Mary Otero Gonzalez from the San Diego Home Loan Education Center, who emphasized the need for education so that more people don’t end up in risky loans.
But testimony from the mortgage lending side said blame shouldn’t be laid at the general foot of the industry.
“We don’t feel that there are any bad loans out there,” said Rob McNelis, a mortgage broker and Realtor who represented the San Diego chapter of the California Association of Mortgage Brokers at the meeting. “There are loans used in improper ways for the wrong people. … And unfortunately, there are some unscrupulous brokers who took advantage of that.”
McNelis pointed out that participation in the self-policing mortgage bankers group is voluntary, and that only 388 of the thousands of local mortgage professionals belong to the group. He said the group holds its code of ethics “dearly,” expelling members if legitimate complaints are filed about them. But he said the association is not large enough for its dishonorable discharge to have much of an impact on the unethical mortgage professional.
“We need to find a way to put some real teeth into the perpetrators who use these products in the wrong manner,” he said. “Unfortunately, you have to really make a big negative impact before you’re under the microscope.”
Mike Drawdy, the vice president for Countrywide Home Loans, said his company has 45,000 clients in “workout status” — borrowers who’ve worked out ways to stay in their homes even though they were facing foreclosure. He urged distressed homeowners to call their loan servicers to work out ways to keep their home.
Jim Bliesner, the task force’s director, said the next two monthly meetings of the group will focus on the foreclosure topic.