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TRENDS IN DELINQUENCIES AND FORECLOSURES IN WASHINGTON
Community Development ResearchFederal Reserve Bank of San Francisco
May 2010
National Trends
Continued signs that economy is on the rebound GDP positive for three consecutive quarters
Unemployment still a major concern; House prices continue to decline or stagnate
Percent of loans entering foreclosure dropped in 4th
Quarter of 2009 HAMP is initiating fewer trial modifications per month
but increasing the number of permanent modifications reached each month As of April 2010, HAMP has resulted in 295,348 active
permanent modifications 50.4% of NSP funding committed as of April 2010
National Trends
GDP Shows Growth for Third Consecutive Quarter in Q1 2010
Real Gross Domestic Product (percent change at seasonally adjusted annual rate)
GDP % changebased on
chained 2005dollars
Source: Bureau of Economic Analysis
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Unemployment Continues to Hover Around 10%
Source: Bureau of Labor Statistics, April 2010
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Recession
U.S. Unemployment Rate
Une
mpl
oym
entR
ate
Case-Shiller Shows Slowed Increasein House Prices in Q4 2009
Source: Case - Shiller Home Price Index
100
120
140
160
180
200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Case-Shiller National House Price Index (2000 = 100, quarterly)
FHFA House Price Index Continues to Fall; Reflecting Activity at Lower End of Market
Source: Federal Housing Finance Agency (formerly OFHEO)
FHFA
Hou
se P
rice
Inde
x20
00=
100
90
100
110
120
130
140
150
160
170
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
FHFA (formerly OFHEO) House Price Index (2000=100, quarterly)
FHFA Four-Quarter Price Change Shows Significant Depreciation in 12th District
Source: Federal Housing Finance Agency (formerly OFHEO) Four-Quarter Price Change by State: Purchase-Only Index (Seasonally Adjusted), 2008Q4—2009Q4)
Modest Drop in Foreclosure Starts in the Fourth Quarter of 2009
Source: Mortgage Bankers Association, National Delinquency Survey
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
2000 2002 2003 2004 2005 2006 2007 2008 2009
National Foreclosures Starts Percent of All Loans
Concern that Upcoming Resets will Continue to Drive New Foreclosures
Monthly Mortgage Rate Resets (first reset in billions of US dollars)
Source: Credit Suisse: Assessing Risks to Global Financial Stability, p. 8. http://www.imf.org/external/pubs/ft/gfsr/2007/02/pdf/chap1.pdf
Loan Modifications: Home Affordable Modification Program
Source: HAMP Service Performance Report Through April 2010: http://www.financialstability.gov/docs/April%20MHA%20Public%20051710%20FINAL.pdf
Loan
Mod
ifica
tions
0
20,000
40,000
60,000
80,000
100,000
120,000
November 2009 December 2009 January 2010 February 2010 March 2010 April 2010
New HAMP Trials Started New Permanent Modifications Started
Washington Trends
Unemployment Rate in Washington Has Mirrored National Trends
Source: Bureau of Labor Statistics
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Recession
Une
mpl
oym
ent R
ate
United States
Washington
Washington’s House Values Continue to DeclineFH
FA H
ouse
Pric
e In
dex
2000
=10
0
Source: Federal Housing Finance Agency (formerly OFHEO)
90
100
110
120
130
140
150
160
170
180
190
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
FHFA House Price Index (formerly OFHEO)(2000=100, quarterly)
United States
Washington
Metro Areas Also Experiencing Declines
Source: Federal Housing Finance Agency (formerly OFHEO)
FHFA
Hou
se P
rice
Inde
x20
00=
100
90
110
130
150
170
190
210
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
FHFA House Price Index (formerly OFHEO)(2000=100, quarterly)
TacomaSeattle
Spokane
Yakima
Washington Foreclosure Starts Rise in First Quarter of 2010; Unclear Why Data Show Volatility Earlier in the Year
Source: Mortgage Bankers Association, National Delinquency Survey
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2005 2006 2007 2008 2009 2010
Washington Foreclosure Starts (Percent of All Loans)
Fore
clos
ure
Star
ts (P
erce
nt o
f Loa
ns)
Washington Mortgages in Serious Delinquency Continue to Rise
Source: Mortgage Bankers Association, National Delinquency Survey
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2005 2006 2007 2008 2009 2010
Seriously Delinquent Mortgages - Washington
Mor
tgag
es in
Ser
ious
Del
inqu
ency
(Pe
rcen
t of
Loan
s)
Some Concern over Sustainability of Loans with Payment Options (in subprime, prime and Alt-A markets)
Perc
ent o
f To
tal C
urre
nt L
oans
0%
1%
2%
3%
4%
5%
6%
7%
8%
Interest Only Jumbo Option ARMs
Characteristics of Remaining "Current" Loans
United States Washington
Neighborhood Stabilization Program
$1,975 M$1,945 M
US Program Nationwide
Committed as of April 2010
Still to be committedSource: HUD NSP Snapshots
$20.5 M
$7.6 M
Washington Program Statewide
Washington Foreclosure Data Maps
Areas Affected by Concentrated ForeclosuresFebruary 2008
Washington Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Areas Affected by Concentrated ForeclosuresFebruary 2009
Washington Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Washington Data Maps
Areas Affected by Concentrated ForeclosuresFebruary 2010
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Seattle Area Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Areas Affected by Concentrated ForeclosuresFebruary 2010
Areas at Risk of Additional ForeclosuresFebruary 2010
Seattle Area Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Portland/Vancouver Area Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Areas Affected by Concentrated ForeclosuresFebruary 2010
Areas at Risk of Additional ForeclosuresFebruary 2010
Portland/Vancouver Area Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Tacoma Area Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Areas Affected by Concentrated ForeclosuresFebruary 2010
Areas at Risk of Additional ForeclosuresFebruary 2010
Tacoma Area Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations
Conclusions
Continued Need for Foreclosure Prevention
Important to reach borrowers with ‘preventable’ foreclosures Borrower Outreach Events Create a foreclosure prevention workbook -- for an example see
Arizona’s: http://www.pima.gov/current/2008_November%20English%20Workbook.pdf
Making Homes Affordable Federal program provides both loan modification and refinance
options Online form available that allows borrowers to assess if they qualify
for the program http://makinghomeaffordable.gov/eligibility.html
Preventing Foreclosure Scams
Foreclosure scams are proliferating, especially in markets with investor interest Some counties are sending notices to all delinquent
borrowers to warn them about foreclosure scams Free media kit available from the Federal Reserve which
includes a PSA and other resources: http://www.federalreserveeducation.org/pfed/mediakit.cfm
NeighborWorks PSA: http://www.youtube.com/nwpad Other 5 Tip brochures and resources available from the
Federal Reserve http://www.federalreserve.gov/consumerinfo/fivetips.htm
Stabilizing Communities and Helping Families After Foreclosure
Develop service delivery and resources for families who go through foreclosure Rental housing assistance Credit repair Minimizing disruption for children (e.g. allowing them to
finish the school year in their old school) Minimize negative spillover effects of vacant properties
on surrounding neighborhood Ensure servicer maintenance of REOs Work with lenders/servicers to acquire and rehab
foreclosures for affordable housing
For More Information: FRBSF Community Development Website
Links to other resources and research on foreclosure trends and mitigation strategies
All publications, presentations available on our website
Conference materials also posted shortly after events
http://www.frbsf.org/community/
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