He also said the brokers were Hispanics who targeted low-income Hispanics.
“They posted fliers in Section 8 housing, low-income apartment housing, really targeting people who were on the lower end and getting them into the exotic mortgages where the payments were really low at first,” Fox said. “But when it reset, there was no way they cold afford the home.”
-MSNBC
It is no secret that mortgage brokers had a HUGE part in this foreclosure crisis. Many licensed and unlicensed mortgage brokers were operating as high volume call centers that pumped out loans to whoever had a pulse.
Personally, I am not privy to what mortgage brokers did in San Diego, but I know in Orange County, there were hundreds of brokers that were nothing more than predatory brokers that churned out one bad loan after another to unsuspecting borrowers from Irvine to Anaheim.
Many of these OC brokers operated for years out in the open and most recently (from 2005-2007), selling nothing but negative amortization mortgages (AKA Pay Option ARM or Pick a Pay) throughout the Golden State to borrowers that should have never, ever, been placed in that loan.
$20-30,000 commission checks for a loan in 2004-2007 were as common as foreclosures are today….
What was the reason they did this?
The answer is EASY! More money (commissions) per loan was made giving people mortgages they could not afford, nor repay, as opposed to placing the borrower in a mortgage they could afford. Simple greed.
Report from MSNBC:
That was the reaction to the North County Times story that reported that a small group of brokers in the North County are responsible for a glut of foreclosures.
“It really raises some serious questions about their selling practices,” said Zach Fox of the North County Times.
Fox looked at 973 real estate brokers and found that 21 of them had foreclosure rates between 40 and 60 percent. Typically, a broker will see 2 to 4 percent of their buyers homes go into foreclosure.
“Some of these brokers, some of these sales people, really set up first-time home buyer programs and brought in people who obviously couldn’t afford them,” Fox said.
Read more from MSNBC
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