The Subprime Epicenter

Reading some weekend coverage this morning, I came across this story at the Washington Post — too good not to post here, given that Irvine, CA is my hometown:

Until recently, Orange County was New Jersey to Los Angeles’s New York — upscale but generally ignored, and not nearly so chic or happening as its urbane neighbor. Television helped change the image with glitzy offerings such as “The O.C.,” “Laguna Beach” and “The Real Housewives of Orange County.” These shows portray the county’s glittering beach communities as the capital of plastic surgery and extreme consumption. But inland, just over the hills, the massive planned community of Irvine has become the nation’s capital of real estate folly.

The WaPo’s Daniel Gross actually took time writing about how my hometown is home to some of the nation’s largest lenders — I suppose we’re at the point now where writers are looking for new angles wherever they can find them.

Oddly enough, as a kid growing up in Irvine, I grew up around the industry — it is the family business, after all. (Maybe that’s why this stuff is in my blood.)

The thing is, all of Southern California is really a mortgage industry hotspot and has been for nearly two decades — and not just for subprime. IndyMac’s up the road in Pasadena. Fremont is in SoCal. Downey Savings. Impac. The list goes on and on.

And there are other hot spots, too: Dallas, for one. Austin used to be one, and to some degree might still be (IndyMac is moving some operations out there, I believe). Salt Lake City, UT, for another. Parts of Florida, too.

I think it’s interesting to see a WaPo writer zero in on Irvine, but he’s a bit misguided calling it the epicenter of the subprime boom: the vast majority of subprime loans, regardless of originator, ended up in one spot. And that would be on Wall Street.