1st Qtr. 2009 vs. 2008: Table Shows Rate of Oregon Foreclosure Increases vs U.S. and Adjacent States.

A final comment on RealtyTrac foreclosure data, comparing 1st Qtr 2009 vs. 2008.

The PDF table I prepared HERE, shows how the Oregon rate of increase compared to the U.S. rate of increase as well as the rate of increase in adjacent states.

Table shows that Oregon across the board had a much bigger increase in ALL foreclosure phases, especially the auction and transfer phases.

When compared to other adjacent states Oregon's rate of increase was also higher, with a few exceptions.

Oregon 4th Qtr 2008 Foreclosures: Starts are Up 111% and Seriously Delinquent Loans Up 140% from a Year Ago.

I have updated the Excel Current Oregon Foreclosure Tool in the right pane (and HERE) to include 4th quarter MBA data. (My prior 3rd quarter post, with explanation of what the tool does is HERE). Key feature of the tool is ability to compare for loans and problem loan rates between loan categories (all loans, prime loans, and subprime loans) and over time.

Four Items to Note

1. For all loans, foreclosure starts increased by 111% from 26 a DAY to 55 a DAY from 4th quarter 2007 to 2008. Prime loan foreclosure starts increased even higher, by 182% (see item 3 below).
   
2. Seriously delinquent loans (foreclosure inventory + 90 day delinquencies) increased by 140% from 8,578 to 20,331. Prime loan seriously delinquent loans grew even faster at 214% (see item 3 below).
   
3. Subprime loans continue to have higher rates of problems than prime loans, but the rate of increase in PRIME problem loans is much higher than for subprime loans. Suprime loans account for 9% of all loans but 40%+ of problem loans; prime loan problem loans however grew by 180%-240% in several problem loan categories.(The PDF HERE provide the data to demonstrate this conclusion).
4. Total loans serviced as reported by MBA declined by 8,454 loans. As the all loan total includes all loan categories, either reporting changes were made, loans switched to servicers not reporting in the MBA survey, OR we had 8,454 fewer homeowners with loans than a the same quarter a year ago. (or some mix of all three reasons). The national survey also saw a decrease of 592,000 loans but no explanation was offered for the change. This kind of change in loans surveyed may be a regular occurrence that slips public attention; I will look at future reports and call out changes for Oregon in future quarterly updates.

Skin in the Game: It Matters Who Makes the Down Payment.

Study HERE from January 2009 Journal of Housing Research, is by staffer at Federal Housing Finance Agency.

".. borrowers who provide even modest down payments from their own resources have substantially lower default propensities than do borrowers whose down payments come from relatives, government agencies, or nonprofits. Borrowers with down payments from seller-funded nonprofits, who make no down payment at all, have the highest default rates."

Good News for Oregon Housing and Community Services in Moody's.com Report on State HFA's.

I recently reviewed a Moody's November 2008 Special Comment on the condition of state housing finance agencies [HFA's] .

[The title of this Special Comment is "State Housing Finance Agencies-Sector Outlook"]. It is available for download to subscribers at moodys.com (a basic subscription is free, but you have to register) .

Moody's overall conclusion is that

"...the outlook for the HFA sector for the next 12 to 18 months is negative as the sector faces unprecedented challenges from the capital markets and a weakened real estate market."

This post will focus on some good news for Oregon Housing and Community Services(OHCS) I found within the data in this report. (In a separate post later this week or next, I will report about some bad news for OHCS I found when analyzing the report data).

The good news: My analysis shows that Oregon has outperformed the average for other HFA's when it comes to changes in 90 day delinquencies, foreclosures, and REO.

For default, foreclosure, and REO data the report covers the period from Dec. 31,2005-June 2008. A total of 35 HFA programs with whole loan/bond programs were included (some state HFA's, including Washiington HFA were not included in the comparisons).

The overall conclusion I reached is that OCHS single family loan inventory increased close to the national HFA average rate of increase, but instead of increasing at a similar pace, OHCS foreclosures and REO declined, instead of growing.

I have prepared a summary of the comparisons I made showing the changing number of loans, as well as the percentage growth, and share of inventory that the changing numbers represent.

That side by side comparison table (Dec. 2006-June 2008) is HERE; Some highlights:

Changes in the Number of Loan Counts (Found in the left side columns in the table).

1. The number of OHCS revenue bond loans increased by 25% compared to an average increase of 22% for all HFA's.
2. The number of OHCS properties in default for 90+ days decreased by 23.9%; Nationally the average number of HFA properties in default 90+ days increased by 11.9%.
3. The number of OHCS properties in foreclosure decreased by 3.1% the average HFA number of properties in foreclosure increased by 24.5%.
4. The number of OHCS REO properties decreased by 30%; the average number of REO properies for all HFA's increased by 66.3%.

Changes in Rates (Found in the right side columns in the table)

1. OHCS's 90+ day default rate (90+ defaults /Total Loan Inventory) decreased by 39%; while the average HFA 90+ day default rate decreased but only by 2%.
2. OHCS's foreclosure rate (foreclosures /Total Loan Inventory) decreased by 23% while the average HFA rate increased by 2%.
3. OHCS's REO rate (REO/Total Loan Inventory) decreased by 44%.while the average HFA rate increased by 36%.

Survey: Self Employed Have More than 3.7 Million "Toxic" Loans.

Press release HERE from the National Association of Self Employed (NASE) says survey indicates that more than 3 million self employed have "toxic" loan types: Alt-A, Alt A ARM's, Option ARM's , or Interest Only loans.

My caveats: 1.Appears that these loan types purposely exclude subprime loans 2.Survey results also show that 70%+ of self employed respondents operated their business out of their home.

Full survey results and commentary are available on web page HERE; Key survey results:

• 22.9 % (3,709,800* At-Risk) of all self-employed business owners used risky or "toxic" mortgages or refinancing that are scheduled to "Reset".

• 19.2 % (3,110,400* At-Risk) of all self-employed business owners are at-risk of "payment shock". They do not know the monthly mortgage payment that they will be required to pay at "Reset".

• 18.4 % (2,980,800* At-Risk) of all self-employed business owners are very worried about the monthly mortgage payment due at "Reset".

• 7.9 % (1,279,800* Immediate Risk of Default) of all self-employed business owners have already missed one to three or more monthly mortgage payments at this date before expected resets in 2009 to 2012.

Portland Tribune Story on Multnomah County Foreclosures.

Written by Steve Law. Printer friendly version of story is HERE. Includes zip code level information.

(Story references my estimate of Oregon ARM Subprime and Alt A homes facing reset over next year. Link to that estimate in my earlier blog post HERE).