North County housing problems cause buzz at forum

Agents, lenders, escrow officers debate issues
By Roger Showley
UNION-TRIBUNE STAFF WRITER

March 3, 2007

A session focusing on North County’s housing ills brought calls yesterday to turn renters into buyers through builder-subsidized homes, to require lenders to offer mortgages their clients can afford and to rezone neighborhoods to make room for the young and old.

Those and many other topics surfaced at “Conversations ’07: Shaping North County Neighborhoods,” a first-of-its-kind forum organized by the North San Diego County Association of Realtors that was held at California State University San Marcos. “You’re dealing with a whole bunch of complex issues that have to be addressed if you want to remain the world’s garden spot,” said moderator John Tuccillo, former chief economist of the National Association of Realtors.

More than 100 real estate agents, lenders, escrow officers and others in the housing industry directed wide-ranging questions and comments at a panel of experts, who responded with innovative and provocative answers to a high-cost housing market that has been a long-standing issue not only for North County, but the entire San Diego region.

Robert Brown, an economics professor at the campus who also analyzes real estate data for the realty group, noted that the last year’s downturn in sales and slight dip in prices in North County mirrored those for the rest of the county.

But Brown said the distribution of prices among resale homes indicated increased activity at the lowest end of the price spectrum. He wondered whether the trend signals a more general price decline this year.

“We’ll have to see what that means,” Brown said.

Much of the discussion swirled around lending practices in the mortgage industry and the plethora of low-cost loans that now are adjusting to higher interest rates, which have been blamed for a rise in defaults and foreclosures.

Robert Camerota, a top officer in GMAC’s consumer lending group, said the problem has arisen because loans requiring little or no down payment enabled unqualified buyers to opt for large homes with pools, casitas and other amenities.

Now, numerous lenders are cutting back or going out of business because they can’t adjust to a slowing market.

Camerota said one of the issues for California is that federal lending standards don’t recognize the state as a high-cost area that would allow for higher conventional loan limits. The state maximum is $439,000, compared with Alaska and Hawaii at $759,000.

“If you can squeeze 10 more people in at a half or three-quarters of a point (in lower interest rates), that’s great for us,” he said.

But Camerota said he’s in a minority among fellow lenders in believing that part of the problem many blame on loose lending standards came from inadequately trained loan officers. His solution: Require licensing for them.

Mary Maloney of San Elijo Hills Realty said the problem doesn’t lie with lenders and real estate agents but with consumers who demand more than they can financially manage.

“They say, ‘No (to lower expectations) – supersize me,’ ” Maloney said. “They want to keep up with the Joneses. You can counsel all day, but they want it and if I don’t sell it to them, she will,” nodding to a fellow agent sitting at her table.

Kim Knowles-Yanez, an urban and regional planner at Cal State San Marcos who runs the liberal-studies department for teacher training, sparked the most debate by suggesting that much more needs to be done to get lower-and middle-income families into their own homes.

She said a typical median household income of $53,000 can only support a mortgage on a $160,000 home, far from the median single-family house price of $625,000 in North County. Click to Read the Entire UT Article