Are We Experiencing Continued Irresponsible Home Lending in Southern California?

Here in Southern California we continue have some apparent irresponsible home lending practices going on.

The Orange County Register, reported on July 27, 2008, in a Marketplace article that one year ago, July 27, 2007, the house at 920 W. Camile St. in Santa Ana was bank-owned and deserted and that "the subprime lending bonanza had blighted a city block".

In October of 2007, this same house sold at auction for $304,500 (a bit more than half what the prior a buyer using 100 percent subprime financing paid in 2006).

This same house at 920 W. Camile was renovated and repainted and was resold in January, 2008, for $625,000, with a $125,000 down payment and a $500,000 mortgage from Wells Fargo Bank. (according to The OC property tax records).

Why would the price of a distressed property on a this same street in Santa Ana double between October of 2007 and January 2008?

Why did Wells Fargo Bank extend good credit to the buyers on this street where comparable homes are selling for $300,000?

In November, 2007, Wells Fargo Bank issued a $289,275 mortgage for this same home at 920 W. Camile to an investor who had purchased the home at a foreclosure auction.
In January, 2008, Wells Fargo Bank issued a $500,000 mortgage to the new owners of this same home.

Does this make good sense? Is this good for Southern California and our economy? Will this help make our communities better places to live?

This kind of lending practice isn't a good thing and will not be supported by Realtors.

Posted by Harrison K. Long, Explore Properties Group
Source: Orange County Register, Marketplace, July 27, 2008



Tags: Mortgage Financing; Home Ownership Economics; Explore Real Estate; Southern California; South OC