North County Times Conducted a Survey on Local Foreclosures

Posted on January 21, 2009
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The North County Times conducted a survey on local repo homes and honed in on a handful of brokers dealing with real estate who have ended up with an extraordinarily high rate of foreclosures. It is much higher than the average of the locality and raises eyebrows. This could not have happened at random or accidentally. The real estate brokers focused on buyers who either could not or did not continue with their mortgage payments.

The investigations started by NCT took into account the records of 5,800 foreclosures from details provided by ForeclosureRadar based in Northern California. The records show that the units (single family as well as detached houses) were taken over by lenders in North County during the period running from 1st January to 31st December 2008.

After having fallen to near zero the number of foreclosure began to surge in 2007. Then one by one the names of the brokers were traced. The data goes back a decade. 4,200 the houses that ultimately went into foreclosure were sold were often sold by a single broker.

As per the rules in California a real estate agent has to work via a broker having a licence. The latter has to sign each deal. This way “sales office” may refer to many sales agents.

The aforesaid newspaper scrutinized all the records of the brokers who had sold a minimum of five units that ultimately landed up in foreclosure. Then the sales number of the particular broker was compiled to calculate the foreclosure rate. Most of the houses that went into foreclosure were sold during 2003 or after that. Thus the sales record covered only the period stretching from 1st January 2003 to 23rd May 2008. It takes a couple of years for the home sales of the region to show up as foreclosure in the statistics. When the price of houses was zooming during the decade preceding 2007, the banks hardly repossessed houses of delinquent borrowers because if the borrower became late in mortgage payment he or she could easily sell the house in a rising market, clear dues and avoid foreclosure. But as the real estate market began to fall the reverse became true – the owners allowed the lenders to take back the houses as the loan amount became higher than the worth of the house.

The final findings show that it was the low income Latinos with low credit ratings that were the targets of this predatory lending.

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