The word sub-prime has dominated the news, and that wave has just about passed.
The next wave is a word “Alt-A” loans. There were only 7% of the loans in San Diego County that were sub-prime. Alt-A loans are just a step above sub-prime.
There are 14% that are Alt-A. In March of this year, according to First American Core Logic, as reported in voiceofsandiego.com, 25% of those Alt A loans are more than 60 days in arrears. That compares to only 12% who were behind a year previously.
79% of the loans are regular loans.
Now there are all sorts of scenarios that this statistical information might portend. It COULD be that a lot of those Alt-A are sand-bagging to get a better refinance, but my intuition tells me that it is just the next wave of short-sales and foreclosures.
What I don’t know, but wonder is what is the price range distribution of the loans? Are they evenly distributed between lower price, medium price and high priced, or are the bunched in one category?
That makes a difference in the Meadows. We have few low end, a lot of middle, and a lot of high.
We will not know until it happens. It may come as a slow leak. It may come in a bunch.
It is highly likely it will come. Whether it impacts the prices will depend on how many buyers there are at the time the next wave hits.
Filed under: Analysis, General Information
