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

New green wood building product takes off in Oregon

Thursday, September 10, 2015
091115-cltjohnson-thumbBY KIM MOORE

Oregon is set to become a hub of a new type of wooden building design as a southern Oregon timber company becomes the first certified manufacturer of a high-tech wood product, known as cross-laminated timber, or CLT.


Child care challenge

September 2015
Wednesday, August 26, 2015
0927OHSUhealthystarts-thumbBY KIM MOORE AND LINDA BAKER

Child care in Oregon is expensive and hard to find. We delved into the numbers and talked to a few executives and managers about day care costs, accessibility and work-life balance.


Run, Nick, Run

October 2015
Monday, September 28, 2015

Controversial track star Nick Symmonds is leveraging his celebrity to grow a performance chewing-gum brand. Fans hail his marketing ploys as genius. Critics dub them shameless.


More Than Meets the Eye

Guest Blog
Tuesday, September 22, 2015
Janet Yellen official Federal Reserve portrait-thumbBY JASON NORRIS | CFA

On September 17, the much anticipated Fed decision was delivered and the equity markets haven't liked it.


Fare Thee Well, Company Town

October 2015
Monday, September 28, 2015

Corporate headquarters are no longer a marker of economic prowess.


Aim High

September 2015
Thursday, August 20, 2015

We get the education we deserve.


Video: 100 Best Nonprofits to Work For in Oregon 2015

The Latest
Monday, October 05, 2015
100-best-NP-logo-2015-video-thumbVIDEO BY JESSE LARSON

Profiling some of the organizations featured in the 2015 list.

Oregon Business magazinetitle-sponsored-links-02