Homeownership remains the primary path to wealth building for most Californians. With accumulated home equity comes the chance to finance an education, start a business, prepare for retirement, or pass on wealth to children and grandchildren.
Higher-cost home loans frustrate this vision. An entire industry has sprung up that offers higher-cost, or subprime, loans to consumers who are thought not to qualify for lowercost prime loans. Higher-cost home loans carry higher interest rates and fees, forcing consumers to pay more to meet often increasing monthly mortgage obligations. Homeowners who face a greater burden in making mortgage payments will have a greater likelihood of falling behind and possibly losing their homes to foreclosure.
Consumers who must spend more money on housing costs have less money to meet basic necessities, cover routine home maintenance, and respond to emergencies that may arise. Entire communities suffer when homeowners: have less money to support local businesses, are unable to make needed home repairs that uplift neighborhoods, and lose their homes to foreclosure which can lower neighborhood property values and increase costs to local municipalities.