Monday, April 16, 2007

Mortgage Defaults in California Near Decade High

A report released today suggests mortgage loan defaults have reached a ten year high in California.

The first quarter's default level was the highest for the most populous U.S. state since the second quarter of 1997. It came amid a sharp rise in defaults on mortgages held by subprime borrowers, or borrowers with blemished credit, across the United States.

There are likely several factors accounting for the rise in mortgage defaults, such as a stagnent growth in the housing sector and the rising popularity of adjustable rate mortgages. But with the majority of defaults coming from mortgages originated within the last 15 months, the new trend of supplying mortgages to illegal immigrants may be the prime factor.

Just recently major banks, like Bank of America, received a lot of criticism for supplying mortgage loans and credit cards to illegal immigrants.