mortgage market update september 17, 2010 – raleigh, nc
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http://www.responsiblelending.org
Mortgage Market Update
September 17, 2010 – Raleigh, NC
2010 North Carolina Affordable Housing Conference
Keith Ernst
http://www.responsiblelending.org 2
June 2010 Snapshot
54.2 million first lien loans outstanding
Agency Prime60%
Option ARM2%
Non-Agency Jumbo Prime
2%
Non-Agency Conforming Prime
6%
FHA/VA17%
Alt-A5%
Subprime8%
Note: All sources on last slide
http://www.responsiblelending.org 3
Loans 2+ Payments Behind
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
4Q20
06
1Q20
07
2Q20
07
3Q20
07
4Q20
07
1Q20
08
2Q20
08
3Q20
08
4Q20
08
1Q20
09
2Q20
09
3Q20
09
4Q20
09
1Q20
10
Subprime
FHA
Prime
All
http://www.responsiblelending.org 4
Foreclosures
2.5
6.9
2.6
4.2
0 2 4 6 8 10 12
CompletedForeclosures & Current
Inventory
Foreclosure Starts
Millions of Mortgages
2007-09
2007-1Q2010
2010-11
Inventory
http://www.responsiblelending.org 5
NC Foreclosures
0
2
4
6
8
10
12
14
16
18
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fo
rec
los
ure
s p
er
1,0
00
Un
its
(B
ars
)
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
To
tal
Fo
rec
los
ure
s (
Lin
e)
Note: 2010 annualized from August foreclosure data and 2009 unit count
http://www.responsiblelending.org 6
NC Foreclosures by Region
0
5
10
15
20
25
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fore
clos
ures
per
1,0
00 U
nits
Charlotte East Northeast Piedmont Triad Research Triangle Southeast West
Note: 2010 annualized from August foreclosure data and 2009 unit count
http://www.responsiblelending.org 7
42%
17%
47%
77%
73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Prime 30-Year FRM Alt-A 30-Year FRM Alt-A Option ARM Alt-A Hybrid ARM Subprime
2006 Loan Origination Cohort
Foreclosure Expectations,for Loans Made in 2006
http://www.responsiblelending.org 8
Limited Numbers of Modifications
398,000 HAMP modifications completed
1.3 million non-HAMP modifications reported by HOPE NOW in last year
5.7 million mortgages presently 2 or more payments behind
http://www.responsiblelending.org 9
Concessionary Mods Starting
Change in Payment Amount, OCC/OTS Regulated
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
1Q-2009 2Q-2009 3Q-2009 4Q-2009 1Q-2010
Decrease >= 20% Decrease 10%-20% Decrease <10%
http://www.responsiblelending.org 10
Payment Reduction Matters
6-Month Redefault (60+), 3Q-2009 Modifications, OCC/OTS Regulated
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Decrease >=20%
Decrease 10%-20%
Decrease <10% Unchanged Increased
http://www.responsiblelending.org 11
Housing Prices
-10.00%
-8.00%
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
4Q-2007
2Q-2005
4Q-2008
http://www.responsiblelending.org 12
Sales Drop
Existing Home Sales (NAR)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Inventory Mos. Supply
http://www.responsiblelending.org 13
Access to Credit
Fannie Mae Purchases, by Score
0%
10%
20%
30%
40%
50%
60%
70%
80%
2004 2005 2006 2007 2008 2009 2010Q1
>740
620-660
http://www.responsiblelending.org 14
Foreclosed and Distressed (60+) as Proportion of 2006 Homeowners
7%
11%
17%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
African Americans
Latinos
Non-Hispanic, white
http://www.responsiblelending.org 15
Sources
LPS Mortgage Monitor (July 2010): Slide 2 Mortgage Banker’s Association, National Delinquency Survey: Slides
3, 4 S.M. Sherlund, “Mortgage Defaults”, Federal Reserve (3/8/2010):
Slide 4 D.B. Bocian, W. Li, K.S. Ernst. “Foreclosures by Race and Ethnicity:
The Demographics of a Crisis”, Center for Responsible Lending (6/18/2010): Slides 4, 14
NC AOC, Slides 5 & 6. US Census, HU-EST-2009-04-37 (2010), Slides 5 & 6 Fitch Ratings RMBS Loss Metrics (Last Updated Aug. 2010): Slide 5 OCC/OTS Mortgage Metrics Report: Slides 9, 10 FHFA Housing Price Index, Slide 11 National Association of Realtors, Existing Home Sales, Slide 12 Fannie Mae, SEC Filings, Slide 13
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