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Subprime loans were 30 percent of market from 2004 to 2006
| Saturday, Oct 13 2007 10:05 PM
Last Updated: Saturday, Oct 13 2007 10:23 PM
Last December, a national study predicted Bakersfield would have the second-highest foreclosure rate nationwide of subprime loans made during 2006.
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It's too early yet to tell whether almost one in four of last year's local subprimes will eventually go south, as predicted by the Center for Responsible Lending, a nonprofit, consumer-focused research group based in North Carolina. Most featured a two-year teaser rate with low monthly payments that have not yet reset to higher levels.
One market research firm, San Francisco-based First American LoanPerformance, estimates 11,329 subprime loans originated in Kern during 2006.
A Wall Street Journal analysis of subprime loans published Thursday also pegged the Bakersfield area -- which includes all of Kern County -- as a hotbed for high-rate loans between 2004-2006. Bakersfield ranked fourth nationwide, the Journal found, with subprimes accounting for 30.2 percent of $26.75 billion worth of home loans made in that time frame. In numbers, that amounted to 53,881 subprime loans. High-rate loans went to middle-class borrowers in wealthy communities as well as poor, inner-city residents, the article noted.
Top metro areas expected to be hit by subprime troubles
Ranks are by percentage of subprime loans made in 2006 projected to ultimately foreclose. Bakersfield’s statistical metro area includes all of Kern County.
1. Merced, 25 percent
2. Bakersfield, 24.2 percent
3. Vallejo-Fairfield, 23.8 percent
4. Las Vegas-Paradise, Nev., 23.7 percent
5a (tie). Fresno, 23.5 percent
5b. Ocean City, N.J., 23.5 percent
7. Stockton, 23.4 percent
8. Reno-Sparks, Nev., 23.2 percent
9a (tie). Santa Ana-Anaheim-Irvine, 22.8 percent
9b. Washington, D.C.-Arlington, Va.-Alexandria, Va., 22.8 percent
11. Riverside-San Bernardino-Ontario, 22.6 percent
12. Carson City, Nev., 22.5 percent
13a (tie). Atlantic City, N.J., 22.2 percent
13b. Visalia-Porterville, 22.2 percent
15a (three-way tie). Los Angeles-Long Beach-Glendale, 22 percent
15b. Nassau-Suffolk, N.Y., 22 percent
15c. Saginaw-Saginaw Township North, Mich., 22 percent
Source: Center for Responsible Lending’s December 2006 study, “Losing Ground.” Note: Projections based on housing appreciation forecasts from Moody’s Economy.com and the center’s analysis of 6 million subprime loans.