Increase of Subprime Home Loans in California

The California Reinvestment Coalition recently released an analysis of 2005 Home Mortgage Disclosure Act date which showed the California leads the United States in the high cost subprime home loans. In California the number of subprime home loans doubled to just under six hundred thousand and from 2004 to 2005 the amount of money lent has tripled.

This data analysis also comes as California sees an increase in home loan defaults. The subprime mortgage industry in California is $1.3 trillion. Due to the defaults many subprime lenders are folding and many of the larger companies are choosing to sell out to the larger investment banks on Wall Street.

California ranked first in foreclosures for three months straight as of November with just under twenty thousand. This number of foreclosures is 1.5 times the national average in the United States as a report by the U.S. Foreclosure Market Report states.

Since low to moderate income individuals are the most likely to borrow with a subprime home loan, any adjustment can place stress on the issue of mortgage payment including job loss, medical bills or a family death. As a result when the mortgage payment isn't paid on time this often leads to what most prefer to avoid, a foreclosure.

To help prevent these numbers from increasing many are calling for data to be disclosed in greater amounts regarding the underlying terms of each subprime home loan. This way more individuals will know what they are getting into before signing for a subprime home loan.