Bloomberg mapped areas hit by this foreclosure crisis, which has been largely the result of a lack of lending standards, against areas hit by the collapse of savings and loans in the 1980s.
The S&L crisis was magnified by bad loans in commercial real estate. But it began as thrifts paying customers higher interest rates on their savings than the thrifts earned on 30-year fixed-rate loans made before rates jumped.
The map shows Orange County got hit by both downturns. The county was ranked No. 24 nationwide in foreclosures in August, and had $10 billion in failed thrift assets during the S&L crisis. Let’s not forget Charles Keating’s Lincoln Savings and Loan, one of the biggest failures, was based in Irvine, although Keating lived in Arizona. Lincoln’s failure cost the government about $3 billion.
Click on the map below to see a larger version; you may have to click twice.
And in other foreclosure news…
- Banks seized 17% fewer O.C. homes in September
- Number of O.C. distressed properties down 2.6%
- Wells Fargo uses varied approach to selling O.C. foreclosures
- Video: Ed McMahon “raps” for O.C. credit-report firm
- O.C. foreclosure notices decline 64%
- O.C. foreclosure inventory hits 3,300 homes
- O.C. listings of distressed homes 6% off peak
And prior to the S&L crisis, we had the recession of the 70’s when I lived through a prime rate of 12% and mortgage rates of 19% along with the “gas shortage” and we all survived. The one thing I noticed through all this is that in the end everyone survives and we end up getting more creative when it comes to new ways of making money. Watch, there will be a whole new type of mortgage loan along with new types of securities. It is the American way.
Lou Pacific
Real Estate and Mortgage Company Consultant
Serving OC and the Industry for 30 Years
Thanks for the cool map. Take away California, Arizona, Nevada, Georgia, DC and Florida and the US does not seem to much of a forclosure problem.
“The one thing I noticed through all this is that in the end everyone survives and we end up getting more creative when it comes to new ways of making money.”
I find it truly unbelievable that someone could — in the face of a global economic meltdown born and bred in Orange County (no doubt w/ the complicity of Wall Street) — have the audacity to suggest that the “creativity” exhibited by banks, mortgage companies and brokers over the past 10 years is somehow positive. Lets hope that prosecutors and judges are equally “creative” in assessing penalties and jail sentences.