Mortgage Problem Affects San Diego

According to recent studies on the San Diego real estate market, the foreclosure rate has risen 219% between July 2005 and July 2006. County records statistics show that in July 2005 there 345 properties in default in the city, whereas in July 2006 there were 756 homes in default.

As in other parts of the country, this trend is attributed to a number of causes including predatory lending practices, aggressively rising interest rates, and little or no money down adjustable interest rate loans. When homeowners get locked into loan deals that may at first seem to their benefit, such as ARMs, they often find that once the rates start rising, they are stuck with extremely expensive mortgage payments. On top of this, the decline in the demand for housing as well as property values has led to many citizens being unable to sell their homes to get out of their situation. Unfortunately, default on payment and subsequent foreclosure then becomes a very real possibility.

According to HUD and the Center for Responsible Lending, a national watchdog organization, predatory mortgage lending involves a wide array of abusive practices including excessive fees, abusive prepayment penalties, kickbacks to brokers, loan flipping, and unnecessary products and add-on fees. HUD warns that while many people believe these loan practices target only lower class homeowners, the incidence of predatory lending with middle and upper class homeowners is on a quick rise.

If you feel you have become the victim of predatory lending, be sure to visit the HUD website for information on who to contact for help.

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