Sponsored by Oregon Business

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
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

Planter's Punch

November/December 2015
Wednesday, October 28, 2015

Molly Rogers believes she has found the solution to excessively syrupy cocktail mixes. She first just needs people to understand her product isn’t foliage.


The Shift to Community Health Care

November/December 2015
Wednesday, October 28, 2015

A conversation with Patrick Curran, CEO of CareOregon.


The Food Pod Grows Up

November/December 2015
Wednesday, October 28, 2015

Oregon's first generation of food entrepreneurs created a brand based on quality and craftsmanship. Can the second generation sustain it?


Photo Log: #TillamookSmile

The Latest
Friday, October 30, 2015
103015-cheesethumbBY CHRIS NOBLE | ART DIRECTOR

Against a changing backdrop Patrick Criseter’s infectious grin remained constant. It’s a cheesy (pun intended) beam that begs for a hashtag.


Roll On

November/December 2015
Wednesday, October 28, 2015

The myth of a freight-dependent economy.


OEN takes Portlandia route in new video

The Latest
Tuesday, October 27, 2015
Screen Shot 2015-10-27 at 3.27.58 PMBY JACOB PALMER | DIGITAL NEWS EDITOR

Several Portland entrepreneurs make appearance in patently silly "The Dream of the Startup is Alive in Oregon" promo.


Where Do We Go from Here?

Guest Blog
Wednesday, October 21, 2015
102115-thumbBY JASON NORRIS | CFA

Volatility reigned supreme over the summer. The old Wall Street adage of, “Sell in May and go away,” was prophetic in 2015.

Oregon Business magazinetitle-sponsored-links-02