Foreclosure trends in washington
Download
1 / 17

Foreclosure Trends in Washington - PowerPoint PPT Presentation


  • 199 Views
  • Uploaded on

Foreclosure Trends in Washington. Craig Nolte, Regional Manager Community Development Federal Reserve Bank of San Francisco. Foreclosure Trends in Washington. Foreclosure data Housing prices Employment growth Impact of Subprime ARMs. Foreclosure Trends in Washington.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Foreclosure Trends in Washington' - paul


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Foreclosure trends in washington

Foreclosure Trends in Washington

Craig Nolte, Regional Manager

Community Development

Federal Reserve Bank of San Francisco


Foreclosure trends in washington1
Foreclosure Trends in Washington

  • Foreclosure data

  • Housing prices

  • Employment growth

  • Impact of Subprime ARMs



Current foreclosure patterns
Current Foreclosure Patterns

  • Foreclosures, particularly in the subprime market, have been increasing across the country

  • In Washington, foreclosure rates had been declining since the 2001 recession, but rose slightly in the fourth quarter of 2006

    • Still, Washington’s rates are lower than national and regional averages

    • Hotspots appear to be in soft real estate areas (Ohio) and in some high investor markets (Florida, Las Vegas)


Foreclosures initiated as a percentage of loans through fourth quarter 2006
Foreclosures initiated as a percentage of loans, through fourth quarter 2006

Source: Mortgage Bankers Association, National Delinquency Survey


Foreclosure rates in washington are below national and regional rates
Foreclosure rates in Washington are below national and regional rates

Foreclosures initiated as a percent of loans, fourth quarter 2006

Source: Mortgage Bankers Association, National Delinquency Survey


Why has washington been insulated from broad foreclosure trends
Why has Washington been insulated regional ratesfrom broad foreclosure trends?

  • Although national house values have softened, the Washington housing market continues to be strong


Washington’s housing market continues to grow regional rates

Home Price Index, through first quarter 2007

Source: Office of Federal Housing Enterprise Oversight


Why has washington been insulated from broad foreclosure trends1
Why has Washington been insulated regional ratesfrom broad foreclosure trends?

  • Although national house values have softened, the Washington housing market has continues to be strong

  • Washington has seen relatively strong job growth


Washington employment growth faster than national average
Washington employment growth faster than national average regional rates

Total non-farm employment, indexed to January 2000 employment levels

Source: Bureau of Labor Statistics


What are areas of concern
What are areas of concern? regional rates

  • The use of adjustable-rate mortgage (ARMs) products has risen, both nationally and in Washington

    • Upcoming rate resets: from just June to October of this year, more than $100 billion of loans are scheduled to reset nationally-- $1 trillion in next 5 years

    • ARMs, particularly those in the subprime loan category, are associated with heightened foreclosure risk


Subprime arms make up a small but increasing share of the conventional market in washington
Subprime ARMs make up a small but increasing regional ratesshare of the conventional market in Washington

Conventional product market share, through fourth quarter 2006

Source: Mortgage Bankers Association, National Delinquency Survey


Subprime arm foreclosure rates have always trended above those for prime products
Subprime ARM foreclosure rates have always trended above those for prime products

But rates have risen markedly in the US recently,

and after years of decline, have started to rise in Washington

Foreclosures initiated as a percent of loans, through fourth quarter 2006

Source: Mortgage Bankers Association, National Delinquency Survey


Subprime arms now account for nearly half of conventional loans entering foreclosure
Subprime ARMS now account for nearly half of conventional loans entering foreclosure…

…even though subprime ARMS make up less than 10 percent of the market

Share of foreclosures in Washington stemming from subprime ARMs, through fourth quarter 2006

Source: Mortgage Bankers Association, National Delinquency Survey


Conclusion
Conclusion loans entering foreclosure…

  • Washington has been relatively insulated from the recent increase in foreclosures

    • High house price appreciation in recent years means that most distressed borrowers can still sell or refinance their homes

  • However, the growing proportion of subprime ARMs and impending rate resets may signal problems ahead

  • Reaching these borrowers now may help to mitigate the costs of foreclosures, not only for the homeowners but also for lenders and municipal governments

    • This could reduce risk of widespread losses seen in other markets


Federal reserve bank of san francisco
Federal Reserve Bank of San Francisco loans entering foreclosure…

  • Community Investments Magazine

  • Research

  • Center for Community Development Investments

  • Initiatives

  • Regulations, resources

  • Events calendar


Foreclosure trends in washington3

Foreclosure Trends in Washington loans entering foreclosure…

Craig Nolte, Regional Manager

Community Development

Federal Reserve Bank of San Francisco

(206) 343-3761

[email protected]


ad