Oregon Subprime and Alt A ARM Loan Estimate: 62,000+ Loans

The Federal Reserve Bank of New York publishes monthly maps and data on subprime and ALT A loans HERE.

After my State Housing Council presentation last week, I went back and did some work to come up with a more refined estimate of how many subprime and Alt A ARM loans exist in Oregon.

The results are shown in the table HERE: my estimate is that there were more than 62,000 subprime and Alt A ARM loans in Oregon as of July 2008. Virtually all of those ARM loans would have been made during the period 2002 to 2007, the qualifying period for the new potential OHCS tax exempt bond refinancing program.

Methodology
The most important caveat about the NY Federal Reserve data is that the counts shown do NOT represent the total universe of subprime and Alt A loans, but instead a portion of that universe. Subprime loan counts shown represent an estimated 47% of the universe of all subprime loans, while Alt A loan counts represent an estimated 90% of the universe of Alt A loans, according to the NY Fed:

• "We estimate that as of year-end 2007, there were about a total of 7 million subprime loans. The underlying data contained 3.3 million active subprime loans, suggesting a coverage ratio of 47 percent. By definition, all alt-A mortgages are securitized. Our best guess is that 2.4 million loans in this portion of the data cover more than 90 percent of the pools marketed as alt-A."

The method I used to estimate Oregon ARM loan counts was to take the count of loans shown in the Fed data for that category, divide by the sample size (47% or 90%) to get an estimate of the total universe. I then multiplied that estimated total universe by the ARM percentage field in the database to arrive at the estimate for ARM loans.