April 2007 Archives

Subprime assault on southern California

Matthew Garrahan:

Riverside County appears to have been most badly hit by the subprime collapse, with mortgage defaults in the first three months of the year up 168 per cent on the same period of 2006, according to DataQuick.

Several factors have contributed to the region’s problems. “There’s a lot of predatory lending going on,” says Gary Aguilar, vice-president of counselling services at Springboard, a national service for people struggling with debt, which is based in Riverside. “I heard of one homeowner going through a divorce who ended up with a $115,000 [£57,410] mortgage on a $45,000 home.”

When property prices were rising, buyers did not want to miss out, he says. “Everyone was jumping on board to buy a home. The majority of people did whatever they could do to have the American Dream and purchased homes they just couldn’t afford.”

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