San Diego: Foreclosure Sanctuary or Future Borrower Hell?

By: Amy Bohutinsky, VP, Communications | July 24, 2008

Lots of buzz today about a lawsuit by San Diego City Attorney Michael Aguirre against one of the nation’s largest lenders - Bank of America - aiming to prevent the bank from foreclosing on homes in his city. The measure is meant to protect homeowners in danger of defaulting on loans, but BusinessWeek’s Peter Coy posts on why he thinks this is a bad idea — writing that as a result, future San Diego could borrowers find it nearly impossible to secure a loan.

How many homes or homeowners could this proposed foreclosure ban impact? Zillow’s public record data from Q1 2008 shows that in the first quarter of this year, 31% of all San Diego homes sold were foreclosures, which is more than twice the U.S. average for the quarter. For San Diego, that’s up from 2% a year earlier in Q1 2007, and less than 1% for each quarter in 2006.

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Categories: Real Estate, Real Estate Analytics

Comments

2 Comments so far

Steve Simon on July 26, 2008 6:05 am

This is real bad business!
It is the hand of Government yet again stepping in to artificially balance an out of balance aspect of our economy.
It diminishes the value of everything if there is no loss! In order to have real gain there must be real loss.
The local (or worse the State or Federal) Government saving those who had bad judgement, bad timing, a bad idea, or just plain bad luck, is using taxpayer money to do it. this simply diminishes the value of all money and sends the message that lenders can again approve in an unprofessional manner as they were doing in the HayDay!
The Secondary Market is already in trouble! Read more on my blog.
Skippy on July 27, 2008 5:06 am

This is just another opportunity for California to lead the nation in stupidity. Remember when they tried to set the freeze the fuel costs that they would pay to distributors in CA. created power shortage’s,fuel shortages and they made it too expensive to do business there. You wouldn’t mind but the people who are being foreclosed are mostly investors who are still getting rents and not paying their mortgages. I may be wrong but the buyers in Fl same problem same results. When you leverage property to buy more and the market declines and you can not borrow more to pay your bills then you go to foreclosure. Hopefully, we will learn when you make regulations to allow people to be able to buy and leverage their property a 100% then they have nothing to lose.