The Morning Report
Get the news and information you need to take on the day.
Our reporting relies on your support. Contribute today!
Help us reach our goal of $250,000. The countdown is on!
Lots of interesting housing and economic news over the last few days. Here are a few links you may have missed:
- A few local real estate brokers carry higher-than-average rates of foreclosures among the homes their clients have bought, reported Zach Fox of the North County Times in a big investigation published in Sunday’s paper. Here’s more:
“A tiny number of real estate brokers is associated with an inordinately large number of foreclosures in North County, raising questions about how just a few salesmen could play a role in sending hundreds of families into foreclosure and causing millions of dollars in losses for lenders. …
A North County Times investigation into thousands of foreclosure records, along with interviews with buyers, reveals a pattern that suggests some real estate agents specialized in clients — chiefly Latinos — who couldn’t afford to buy homes, and helped them buy as many as possible. …
— Essentially all the borrowers, 99 percent, had Latino surnames.
— The majority of mortgages issued on the sales, 93 percent, carried no down payment.
— The list of lenders on those mortgages reads like a graveyard of failed institutions, many of them exclusively subprime lenders: Washington Mutual, Argent Mortgage, Accredited Home Lenders and Fieldstone Mortgage.
Some, though not all, of the real estate agents sold multiple houses to the same person, with all of the purchases going to foreclosure in some cases.
Still, it is unclear how much involvement the real estate agents had in the loan origination process, where any misrepresentation of income — and therein, any fraud — would occur.”
The prevalence of easy-to-get loans and a concerted push nationwide to increase homeownership among Latinos has left that community reeling from the impacts of foreclosure in the falling market. Here’s a story I wrote about that issue as the region’s foreclosure activity was starting to pick up dramatically in 2007.
- In case you think these troubles are only subprime, here’s the Washington Post with a look at a growing trend of foreclosures among prime borrowers, or those who have better credit:
One oft-repeated assertion no longer holds true. Those in trouble are not, primarily, lower-income borrowers. The foreclosure crisis has become a wave, afflicting neighborhoods of every stripe — but particularly communities created by the boom itself.
Some of this is hardly news to us, but it’s interesting to see the national news try to help the country make sense of the craziness here in Southern California. Like this bit:
Southern California was the epicenter of the housing bubble, in many ways. Four of the largest lenders had offices there, and Riverside County became a showcase for how communities can create wealth through real estate. Now the county is a case study of what can happen when the only industry in town is growth itself.
“These economies were self-feeding off the housing boom. And when the boom went bust, there was no safety net to fall back on,” said Sean Snaith, an economist at the University of Central Florida’s business school.
Locally, we’ve been watching the creep of mortgage trouble from the subprime to the prime borrowers for a while. Last month’s release of the Case-Shiller index showed more weakness in the high-priced home tier (homes worth $469,000 or more in the most recent index) than in the other two tiers for the first time, as Rich Toscano pointed out.
- We started a conversation late last week about the nexus between government and development after this story about Barratt American’s Mick Pattinson and his opposition to banks freezing funding for homebuilders. Check out the conversation and send me an e-mail (firstname.lastname@example.org) if you have thoughts to add. I have a couple of posts to add but I’ll wait for your thoughts.
- I’m supposed to hear from the Clevelands today with the final update on their house hunt that we’ve been following for months now in Survival. Check back later today for Chapter IX.