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Sunday, May 06, 2007

Evicting the "Better-heeled"

by Calculated Risk on 5/06/2007 12:27:00 PM

David Streitfeld writes in the LA Times: Better-heeled failing home economics too

... in recent months [Sheriff's Deputy Mike Strickland] has begun venturing into neighborhoods with spacious homes and groomed yards, bringing his legal warnings to those who have fallen hopelessly behind on their mortgages.

These people typically bought a home they couldn't afford or drained their equity through incessant refinancing. If they had a chance to sell, they passed it up.

Eventually, the lender foreclosed on the property. When it was over, the home was auctioned off.

Now there's a new owner. But they still won't leave.

In some cases it's denial; in others, unwarranted hope.
That's when Strickland shows up.

"You see me coming. You know I'm not exactly bringing tidings of joy," the deputy says. "I'm the grim reaper."
The problem is worse in the lower income areas with subprime loans. Ronald Campbell writes in the OC Register: Who's at risk from subprime implosion?
The Orange County Register analyzed all 920,000 home purchase mortgages made in California in 2005, the last year for which complete data is available. The analysis showed a strong geographic pattern to subprime loans:

Buyers in fast-growing areas such as the Inland Empire and in lower-middle-class neighborhoods like Santa Ana were far more likely to sign subprime mortgages than buyers elsewhere.
Subprime areas are getting hit the hardest, but I doubt the evicted homeowner, described in Streitfeld's piece as living in "a gated community in Chino Hills", was a subprime buyer. This is more than a subprime problem.