Tom Fudge: In San Diego, homeowners are defaulting on their loans at an increasing rate. At the moment the default rate is 3.3 homes per thousand. The increasing default rate is a nationwide phenomenon and there are cities and regions that are doing much worse. San Diego's default rate, for instance, pales in comparison to Cleveland's rate of 25 homes per thousand. But the higher rate of defaults across the nation share a common cause. They are driven largely by subprime lending.
Sub prime lending refers to the practice of making home loans to people who would typically not qualify for one. These loans are given out to people with poor credit. When they're done right, they can help a person buy a home and get their finances back in order. But the increasing mortgage default rate, and the current turmoil in the home mortgage industry, shows that these loans are not being done very well.
Guests
- Kelly Bennett, staff writer for VoiceofSanDiego.org
- David Maiolo, founder of the Fair Lending Alliance
-
Mark Goldman,
real estate finance analyst with the London Group Realty Advisors and a lecturer on real estate investments at SDSU
End Music: Promise of Spring by Clive Carroll, from the album Sixth Sense (1999)
