HIGHER RISK HAS LENDERS WARY DEFAULT LEVELS RISE IN PARTS OF CALIFORNIA.Byline: Gregory J. Wilcox Staff Writer Mortgage lenders in California are more critically scrutinizing loan applications now because of higher default risk resulting from a shift in sales patterns as the real estate market nears the end of its boom cycle, an industry tracker said Monday. During the second half of 2005, risk levels for new mortgages statewide increased 28.6 percent across California from the prior six months, said San Juan San Juan, city, Argentina San Juan (săn wän, Span. sän hwän), city (1991 pop. 353,476), capital of San Juan prov., W Argentina. It is a commercial and industrial center in an agricultural region. Capistrano-based HomeSmartReports.com. The risk factor is lowest in coastal Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, and the Bay Area, the company said. The highest risk factor is in rural Central Valley communities. This is the first time the company issued a risk report, so a historical comparison is not available, said company President Mike Ela. Previously, this information was only available to the industry. The risk is based on a scale of 1, the lowest, to 100, the highest. At 6.72 the risk is highest in the Hanford and Corcoran area. The lowest is 0.80 in Orange County and San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. . The risk factor in the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Long Beach and Glendale area is 1.44, and in Oxnard, Thousand Oaks Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. and Ventura it is 1.12. The biggest jumps came in the Salinas Salinas, city, United States Salinas (səlē`nəs), city (1990 pop. 108,777), seat of Monterey co., W Calif.; inc. 1874. It is the shipping and processing center of a fertile valley famous for its grain and lettuce. and Santa Cruz-Watsonville areas, while the trend was down in rural areas north of Sacramento such as Chico and Yuba City Yuba City (y  `bə), town (1990 pop. 27,437), seat of Sutter co., N central Calif., on the Feather River; founded 1849 during the gold rush; inc. 1908. , the company said. ``While the levels may not look excessive, you have some markets where the risk is on the rise,'' Ela said. The stressed areas are the ones where buyers are stretching their finances the most to get into a house. Stepped-up scrutiny means lenders could be asking for more financial information from borrowers and seeking more detailed appraisals of property. Ela says it also means consumers now need to do more homework to find out whether they might be buying in a stressed area. The company's site offers free education information and sells other information such as valuation reports. John Karevoll, an analyst at La Jolla-based DataQuick Information Systems, said this does not signal a major market turn. ``This just means that more loans are now being flagged for further scrutiny than was the case six or nine months ago,'' he said. ``The loan applications may go through just fine.'' Gregory J. Wilcox, (818) 713-3743 greg.wilcox(at)dailynews.com |
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