Home Archives May 2007 Northwest's mortgage delinquency trails rest of nation

Northwest's mortgage delinquency trails rest of nation

| Print |  Email
Tuesday, May 01, 2007

As it does with so many other things — such as job growth and population growth — the Pacific Northwest sparkles when it comes to the mortgage-delinquency rates that have so roiled Wall Street recently.

Rates of mortgage delinquency were a bit higher in the Pacific Northwest at the end of December than three months earlier. But they remain sharply below the national average.

Oregon’s Q4 delinquency rate was less than half the national average. Only Hawaii had a lower rate, 2.40%. Montana at 2.84% ranked third-best among the states, Washington at 2.93% No. 5 after Wyoming (2.85%).

Perspective on Pacific NW delinquency

Q4 as of 12/31 Past due Seriously
delinquent
All mortgage loans Q3 06 Q4 06 Q3 06 Q4 06
Washington 2.56% 2.93% 0.83% 0.90%
Oregon 2.33% 2.62% 0.73% 0.76%
Idaho 3.06% 3.36% 0.87% 0.95%
Montana 2.52% 2.84% 0.83% 0.88%
Alaska 3.03% 3.13% 0.86% 0.87%
California 2.68% 3.25% 0.74% 1.06%
U.S. 4.84% 5.31% 2.00% 2.21%
Data: Mortgage Bankers Association (www.mbaa.org)

Delinquency rates were slightly higher — above 3% — in Alaska, California and Idaho, yet all compare favorably with the U.S. average.

States with the fewest seriously delinquent loans at the end of December, in order, were:
Hawaii (0.66%), Oregon (0.76%), Wyoming (0.78%), Arizona (0.85%), Alaska (0.87%), Montana (0.88%), Washington (0.90%), Virginia (0.94%).

The statistic that grabbed Wall Street by the throat when the Mortgage Bankers Association survey came out was on subprime adjustable-rate mortgages (ARMs). Nationally, the delinquency rate on these loans jumped 122 basis points (hundredths of a percent) from 13.22% at the end of September to 14.44% at the end of December.

Yet it helps to keep a sense of perspective when the headlines seem to scream that the sky is falling or that the world is coming to an end. That headline-grabbing delinquency rate on subprime ARMs in Q4 was actually lower than during the first three quarters of 2002 (15.02%, 15.56% and 14.71%). True, 2002 was not a particularly strong year for the U.S. economy, but inflation-adjusted growth averaged a bit over 2.0%; it was not a recession year.

The region’s strong standing in mortgage delinquency shows up in surveys of credit quality at the region’s banks.  “Credit quality remains outstanding at virtually all of the institutions that we track,” reports McAdams Wright Ragen banking analyst Sara E. Hasan. With the exception of Washington Mutual, the region’s banks avoided the subprime market. About 6% of Washington Mutual’s loans are to subprime borrowers.

Anyone who’s been paying attention knows that aggressive lenders have been luring people for years into more house than they can afford. Why Wall Street should be shocked — shocked — that some borrowers are in trouble now that rates have risen is a mystery to us. The question is whether trouble in subprime territory spills over to the rest of the economy. The situation bears careful monitoring.

— Excerpted from Marple’s Pacific Northwest Letter, editor Michael Parks. For information about this biweekly report on Northwest economic trends, visit www.marples.com.

 

More Articles

Shifting Ground

November/December 2014
Wednesday, October 22, 2014
BY JOE ROJAS-BURKE

Bans on genetically modified crops create uncertainty for farmers.


Read more...

Downtime

November/December 2014
Wednesday, October 22, 2014
BY JESSICA RIDGWAY

Bob Dethlefs, CEO of Evanta, balances work and play.


Read more...

Revenge Forestry

November/December 2014
Tuesday, October 14, 2014
BY JONATHAN FROCHTZWAJG

A flare-up in the Elliott Forest raises questions about détente in Oregon’s timber wars.


Read more...

Healthcare pullback

News
Thursday, November 20, 2014
112014-boehnercare-thumbBY JASON NORRIS | OB CONTRIBUTOR

Each month for Oregon Business, we assess factors that are shaping current capital market activity—and what they mean to investors. Here we take a look at two major developments regarding possible rollbacks of the Affordable Care Act (ACA).


Read more...

Political Clout

November/December 2014
Wednesday, October 22, 2014
BY KIM MOORE

Businesses spend billions of dollars each year trying to influence political decision makers by piling money into campaigns.


Read more...

OB Poll: Wineries and groceries

News
Friday, October 24, 2014

24-winethumbA majority of respondents agreed: Local vineyards should remain Oregon-owned and quality is the most important factor when determining where to eat or buy groceries.


Read more...

The Backstory

October 2014
Thursday, September 25, 2014

In our cover story this month, Wendy Collie, CEO of New Seasons Market, and Kim Malek, owner of Salt & Straw, discuss their rapidly growing businesses and Portland’s red hot food scene. The conversation provides an interesting lens through which to explore trends in the grocery store and restaurant sectors.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS