Sunday, May 31, 2009


Subprime was just the beginning, and never was the problem. I keep making this point...

Today, there are 18,000 Alt-A mortgages in Sonoma County. They account for about 18 percent of the county’s 102,000 home mortgages — triple the U.S. average, according to First American CoreLogic, a real estate research company.

It is a far larger share of the county’s real estate holdings than subprime loans, which accounted for about 10 percent of local mortgages at their peak five years ago, according to First American CoreLogic.

Over the next three years, about two-thirds of the Alt-A borrowers in Sonoma County will see their payments jump sharply, according to First American CoreLogic. The trend will peak in the summer of 2011, the research firm projects.

At issue is just how many people have been making minimum payments, tacking on unpaid interest to the principal. Some of these people were steered into those loans by brokers who were getting side payments.

(ht reader j)