California Subprime Foreclosure Crisis -Lending Charts 2008

8/9/2019 California Subprime Foreclosure Crisis -Lending Charts 2008

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The Subprime Foreclosure Crisis:Emerging Policy Responses

UC Center SacramentoJune 11, 2008

Kevin SteinCalifornia Reinvestment Coalition


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California Default Notices

0

50,000

100,000

150,000

200,000

250,000

300,000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

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2005

2006

2007

e

2008

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2009

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Record California Foreclosure Activity

Source: DataQuick Information Systems


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California Reinvestment Coalition

Top Higher Cost Lenders in CA: 2006Rank Lender Rank Lender

1 WMC/GE (closed) 11 American Home (BK)

2 New Century/Home 123 (BK) 12 Decision One (shut down)

3 WaMu/Long Beach (closed) 13 Countrywide Bank/BofA?

4Fremont Inv & Loan (cease &desist by FDIC) 14

Greenpoint Mortgage(Capitol One closed it)

5 Argent (Citigroup) 15Deutsche Bank/MortgageIT(closed retail)

6Countrywide HomeLoans/BofA? 16 Accredited (shut down)

7 Merrill/First Franklin (closed) 17 Fieldstone (BK)

8 BNC (Lehman shut it down) 18 Alliance Banc (BK)

9 Option One (no originations) 19HomecomingsFinancial/GMAC (withering)

10 Indymac Bank 20 First NLC Financial (BK)


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Chart 2. Distribution of Loans by Neighborhood Minority

Composition in Study MSAs, 2006

0.0%

25.0%

50.0%

High-Risk Lenders 40.8% 20.2% 21.0% 9.1% 8.9%

All Lenders 22.2% 15.4% 24.3% 16.3% 21.8%

80% - 100% 50% - 79% 20% - 49% 10% - 19% < 10%

Source: Table 1

Paying More for the American Dream 2:

The Subprime Shake Out and Its Impact on Low-Income and Minority Communities,March 2008


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Source: Credit Suisse

ARM Resets from January 2007

Outlook for Foreclosures: ARM Resets Provide Clues

2007 2008


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Loss Mitigation Surveys: Words vDeeds I and II

No long term loan modifications

Foreclosures most common outcome for B

Short sale next most common outcome

No outreach before rate resets Agmt? Servicers hard to work with

Survey III foreclosures, unaffordableloans and fraud, language issues, writedowns


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CRC Foreclosure Prevention Principles

Foreclosure Moratorium

Outreach and education, support for counselors Transparency of loss mitigation

LOAN MODIFICATIONS!

Rescue refinance products Nonprofits to buy foreclosed properties

Channel of communication

Outlaw bad lending practices Hold Wall Street liable

Make regulators accountable for enforcing law


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Opportunities: State Legislation

SB1137 amend foreclosure process

AB69 servicer reporting on loss mit

Servicer specific reporting is key

AB1830 - mortgage reform in flux AB2880 - brokers - dead

AB2359 assignee liability limited AB2740 servicing obligations - ?


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Opportunities: State Policy Governors Agreement with servicers Is it working? (Data) Can it be expanded?

Can it facilitate constructive dialogue on process REOs nonprofits buy foreclosed homes

Process and $ (Wells? Merrill Lynch?)

Funding for counselors - CHOPI, CalHFA, other? Tie counseling to problematic loans

Tenant protections notice, time, utilities, $

Servicers commit BofA/CW?

Trustees commit US Bank?


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Opportunities: Federal

HOEPA comments on high cost loans

Bankruptcy Reform Govt to buy distressed loans & rework them

$ for local agencies to buy properties Support for housing counselors

Anti Predatory Lending bills

Better disclosures on loan documents

Future of these bills unclear!

California Subprime Foreclosure Crisis -Lending Charts 2008

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