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

Back to School

September 2014
Wednesday, August 27, 2014
BY LEE VAN DER VOO

By now we’ve all read the headlines: Starbucks is giving away free degrees. Except it isn’t.


Read more...

Two Sides of the Coin

Contributed Blogs
Wednesday, October 22, 2014
22 twosidesBY JASON NORRIS

Historically, when the leaves fall, so do the markets. This year, earnings, Europe, energy and Ebola have in common? Beyond alliteration, they are four factors that the investors are pointing to for this year’s seasonal volatility.


Read more...

A Good Leap Forward

September 2014
Wednesday, August 27, 2014
BY AMY MILSHTEIN

Agriculture businesses ramp up to meet international demand as workforce and succession challenges loom.


Read more...

College Hacker

September 2014
Wednesday, August 27, 2014
BY KLINT FINLEY

Treehouse CEO Ryan Carson builds a 21st-century trade school.


Read more...

Downtime

September 2014
Wednesday, August 27, 2014
BY JESSICA RIDGWAY

How State Representative Julie Parrish (House District 37) balances life between work and play.


Read more...

College Conundrum

October 2014
Thursday, September 25, 2014
BY KIM MOORE

University and college tuition fees have been rising for more than a decade, while state funds for higher education have steadily declined.


Read more...

True Blood

October 2014
Thursday, September 25, 2014
BY JOE ROJAS-BURKE

Antibiotics really aren’t magic bullets.


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