Subprime Tsunami, Where Did It Start? | More Short Sales and REOs Coming…A Whole Lot More!
If you are in Southern California you must read the Orange County Register. Their real estate section is fantastic. This is part of an article from the Register…
This graph shows how the Sub-prime loans spread like locusts across the US. Keep in mind the sheer numbers this graph represents. Many people have sub-prime or Alt-A loans and don’t even know it
Since 2004 the Fed has required lenders in their HMDA reports to break out loans carrying interest rates at least 3 percentage points higher than the comparable Treasury bill. The Fed believes these high-priced loans are equivalent to subprime and Alt-A loans, though the industry defines those loan categories by credit scores, not interest rates.
Here are maps showing subprime volume as a percentage of all home loan volume by county and by year.
The scale is the same for every map: yellow where subprime is 20 percent or less of total volume, green for 20 percent to 30 percent, light blue for 30 percent to 40 percent and dark blue where the subprime volume exceeds 40 percent.
The patterns are striking. In 2004 subprime was big in only a few areas of the country, most notably Texas and the Deep South. By 2005 it had built strongholds in Riverside and San Bernardino counties and especially in the San Joaquin Valley. By 2006 subprime was everywhere. But in 2007, when big players like Irvine-based New Century abruptly collapsed, the subprime wave rolled back.
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