Friday, May 4, 2007

What's Behind Oakland's High Foreclosure Rate?

By Kara Platoni
Fri, May 4, 2007 at 4:54 PM

Carol Lloyd's Surreal Estate column in the Chron on the use of short sales to avoid foreclosure contains a really arresting statistic about the state of homeownership in Oakland:

According to Realty Trac, Oakland currently has the 22nd highest foreclosure rate in the nation, with one foreclosure for every 146 households -- almost double the national average.
She goes on to note:

Realty Trac currently has 1,902 foreclosures, default notices and bank-owned sales listed in Antioch -- amounting to one in 15 of its 29,466 households. By comparison, San Francisco has 882 similar listings, only one in 373 of the city's 329,700 households.

Anyone got a theory about why Oakland would have a much higher rate of foreclosures than San Francisco? More investor speculation in the East Bay? Less affluent homeowners? More recent buyers who took advantage of adjustable rate mortgages and other "nontraditional" loans, then got slammed when the rates changed? Is Oakland a bigger target for subprime lenders, who may have encouraged borrowers with middling-to-bad credit to buy homes they couldn't really afford, thanks to these kinds of nontraditional loans?

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