How Many Subprime Loans Are in My County?

15 Oct How Many Subprime Loans Are in My County?

The Wall Street Journal has completed an extensive county-by-county study of subprime loans from 2004 through 2006. Since there is traditionally a two or three year teaser rate on these horrid loans before the monthly payments skyrocket, the WSJ’s study paints a scary picture for the next few years. While you might believe that your “white bread” upper-middle class neighborhood is safe from the impending avalanche, you had better think again.

According to the WSJ article, “Subprime mortgages were initially aimed at lower-income consumers with spotty credit. But the data contradict the conventional wisdom that subprime borrowers are overwhelmingly low-income residents of inner cities. Although the concentration of high-rate loans is higher in poorer communities, the numbers show that high-rate lending also rose sharply in middle-class and wealthier communities.” [Emphasis added.]

So, exactly how bad are things in your county? Check out the WSJ interactive map that will allow you to track the meteoric rise of subprime loans in your back yard. For instance, in my hometown of Jacksonville, the number of subprime loans in 2004 was 12,844. Over the next two years, another 52,560 subprime loans were written, most of which haven’t ended the teaser rate period.

The only conclusion to draw from the WSJ study is that the housing market will get much worse before it gets better, and without much needed relief from congress in the form of the pending bankruptcy reform legislation, hundreds of thousands of families will lose their homes.

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Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida. Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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