Posted on 03/29/2008 7:34:41 PM PDT by Lorianne
A year ago Irvine, Calif., was still riding high on the subprime boom; then almost overnight the industry and more than 4,000 good paying jobs vanished.___ IRVINE, Calif. (CNNMoney.com) -- The subprime mortgage meltdown has shaken the entire U.S. economy. But nowhere might the impact be as stark as Irvine, California, a planned community nestled between Los Angeles and San Diego.
A year ago at this time, Irvine was home to 18 subprime lenders, including many of the leaders in the field, such as New Century Financial and Option One. Then, in what seemed like the blink of an eye, 4,100 good-paying white collar jobs were gone, or roughly 2% of the city's work force.
And while that may not sound like a huge number of jobs lost, the ripple effects of the collapse of what was once a vibrant industry has extended far beyond the mortgage lending arena.
Irvine had become the center of the subprime industry almost by accident. As the business of writing mortgages to riskier borrowers grew rapidly in the middle of the decade, many top employees at the established subprime firms struck out on their own, setting up shop nearby.
(Excerpt) Read more at money.cnn.com ...
I was going up there regularly a year ago, and it was quite a boomtown. Every unbuilt space seemed to have construction going on. If I go there now will I see tumbleweeds blowing through the streets?
“The people I feel sorry for are the ones who bought houses in CA at a much inflated price, make their mortgage payments on time, do all the right things, and see the value of their homes declining rapidly. It’s really bad for people who have to sell their homes right now, due to a change or transfer in their jobs.”
they - those that must move - are a small minority of those who meet the rest of your criteria
and they are not without options
one option is to get a renter into a five-year or longer lease on the house they need to sell
in most cases, if they get the bulk of their monthly obligation on it, then, that home and its rental income is seen by lenders as an investment and usually does not prevent them from buying another home in their new location
even when it is not seen that positively, the rental income keeps foreclosure at bay while they make whatever residential adjustments they need to in their new locale
when the market turns around, which it will, they can quit leasing it and try to sell it again
for everyone else who met your criteria, the ‘loss’ is an unrealized ‘loss’ - a paper loss - which may in fact be reversed by the time they decide to sell
One of the things I think about is square footage per person. It jas got to be way, way up there. What was considered a OK house when I was a kid is now thought of as tiny.
I used to work for New Century in their IT department.
This guy’s estimate of job losses in Irvine is way off, probably by a factor of 3.
In Orange County, there was probably 20,000+ jobs in total from the sub-prime mess.
Most people found jobs right away, however, right now, there are plenty of people with mortgage-only backgrounds who are struggling to find jobs in Orange County.
You can pick up a house in Detroit for $20,000.00.
Hell of a deal, if you don’t mind Detroit. (I mind.)
more than most realize...i don’t have exact numbers but it’s not horrible as the media portrays...
Or as horrible as some around here portray it.
exactly...it’s bad, but seriously easily over 90% or more are paying on time in many many places across the country.
Bottomline, some unscrupulous loans were made, some bad decisions by folks, some ridiculously unsound loan programs that were invested in by many and poof, bad stuff...it’s not surprising but also not a dooms day scenario...give it two years and we’re all back to a pretty normal housing market where houses are affordable and equity will grow at a more normal 3-5% in most places vs 200% in some places like AZ/CA, etc...
It’s a good old fashioned market correction as much as many many people don’t want to hear it, it’s true.
Real estate agents? Uh,I think the article is about the mortgage industry.
Don’t worry, as I am sure you can easily find one of those “set the mood” articles written by a young journalist, that will blame “greedy” real estate agents for the sky falling on your wallet.
They probably had a lot of “gloom and doomers” poor-mouthing the real estate boom. That’s what I keep reading here on FR. /sarc
There has always been a solution to the real estate fiasco in California. The rule of 25. If debt service requirements are no greater than 25% of GFI, down payments rise, commitment is generated and inflation is naturally buffered.
We lived in SoCal for a short time (ahh... what a wonderful place to live, I just loved it). I got a job with Washington Mutual home loans division, was laid off seven months later with severance. We left our apartment, and moved to Fresno. Ah well. I wish the folks in OC well. It’s just lovely there and I miss it a lot.
True. The writers I worked with all found jobs, but their backgrounds were in tech writing, not mortgage origination.
ping
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