Delinquencies and Foreclosures in Nevada...Las Vegas Reno Carson City Foreclosures in Nevada...
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TRENDS IN DELINQUENCIES AND FORECLOSURES IN NEVADA Jan Bontrager, Community Development Department, Federal Reserve Bank of San Francisco April 2009
Transcript of Delinquencies and Foreclosures in Nevada...Las Vegas Reno Carson City Foreclosures in Nevada...
TRENDS IN DELINQUENCIES
AND FORECLOSURES IN
NEVADA
Jan Bontrager, Community Development Department, Federal Reserve Bank of San Francisco
April 2009
Outline of Presentation
National Trends
Rising foreclosures
House price declines
Rising unemployment
Nevada
Trends in foreclosure
Housing market softening
Rising unemployment
Scale of loan modifications still falls short of need
National Trends
National Trends
Foreclosures rose steadily in 2008, with wide
repercussions for US economy
After a slight decline in the national foreclosure rate in
the 3rd Quarter of 2008, rose again in 4th Quarter
Factors driving foreclosures nationally
House price declines
Rising unemployment, coupled with turmoil in financial
and credit markets, may further influence foreclosure
rate going forward
National Foreclosure Starts Rose Slightly in 4th
Quarter of 2008
Source: Mortgage Bankers Association, National Delinquency Survey, 4th Q 2008
0.00
0.20
0.40
0.60
0.80
1.00
1.20
2000 2002 2003 2004 2005 2006 2007 2008
National Foreclosures Starts Percent of All Loans
Nationally, House Prices Continue to Decline
Source: Case - Shiller Home Price Index, 4th Q 2008
100
120
140
160
180
200
2000 2001 2002 2003 2004 2005 2006 2007 2008
Case-Shiller National House Price Index (2000 = 100, quarterly)
Recession Marks Significant Jump in
Unemployment
Source: Bureau of Labor Statistics
0
2
4
6
8
10
12
1989 1993 1997 2001 2005 2009
Unem
plo
ym
ent R
ate
U.S. Unemployment Rate
Recession Unemployment Rate
Nevada Trends
Nevada Has Highest Foreclosure Rate in the US
Source: Mortgage Bankers Association, National Delinquency Survey, 4th Q 2008
0
0.5
1
1.5
2
2.5
3
Alaska Washington Oregon Utah Idaho Hawaii US California Arizona Nevada
Foreclosure Starts (Percent of All Loans)
4Q 2005 4Q 2006 4Q 2007 4Q 2008
Nevada Saw a Continued Increase in Foreclosure Starts
in 4th Quarter 2008
Source: Mortgage Bankers Association, National Delinquency Survey, 4th Q 2008
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2005 2006 2007 2008
Nevada Foreclosure Starts(Percent of All Loans)
Fore
clo
sure
Sta
rts
(Per
cen
t o
f Lo
ans)
Nevada’s House Prices Have Dropped
Significantly
Source: Federal Housing Finance Agency (formerly OFHEO), 4th Quarter 2008
FH
FA H
ouse
Pri
ce I
ndex
20
00
=10
0
100
120
140
160
180
200
220
240
2000 2001 2002 2003 2004 2005 2006 2007 2008
FHFA House Price Index (formerly OFHEO)
(2000=100, quarterly)
United States
Nevada
Metropolitan Areas are Similarly
Experiencing Declines in House Prices
Source: Federal Housing Finance Agency (formerly OFHEO), 4th Quarter 2008
FH
FA H
ouse
Pri
ce I
ndex
20
00
=10
0
100
120
140
160
180
200
220
240
2000 2001 2002 2003 2004 2005 2006 2007 2008
FHFA House Price Index (formerly OFHEO)
(2000=100, quarterly)
Las Vegas
Reno
Carson City
Foreclosures in Nevada Extending into All
Mortgage Products
Source: Mortgage Bankers Association, National Delinquency Survey, 4th Q 2008
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2005 2006 2007 2008
Perc
ent of
Loans
by T
ype
Foreclosure Starts by Loan Type
Subprime ARM
Prime ARM
Subprime Fixed
Prime Fixed
Nevada Saw High Rates of High-Cost Lending During
Subprime Boom, Above National Average
Source: Home Mortgage Disclosure Act Data, 2005
20.4%
22.7% 23.1%23.6%
24.3%
25.9%
27.3%28.0% 28.1%
29.2%
0%
5%
10%
15%
20%
25%
30%
35%
Hawaii Alaska Oregon Washington Idaho California USA Arizona Utah Nevada
Percent of All Borrowers with High Interest Conventional Loans, 2005
High Cost Lending in Nevada More Prevalent
Among Minority Borrowers
Source: Home Mortgage Disclosure Act Data, 2005
0%
10%
20%
30%
40%
50%
60%
70%
All borrowers White borrowers Asian/Pacific Islander borrowers
Native American borrowers
Black borrowers Hispanic/Latino borrowers
High Cost Conventional Loans by Race, 2005
Unemployment Rate in Nevada also on the
Rise, Above US Average
Source: Bureau of Labor Statistics, March 2009
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Unemployment Rate
United States
Nevada
Employment Trends by Industry in Nevada
Source: Bureau of Labor Statistics, December 2008
Total Employed (thousands) Percent Change
Nevada Feb-09 1-mo. 3-mo. 12-mo.Total 1,217.7 -7.6 -7.5 -5.2
Leisure & Hospitality 318.1 -7.2 -7.5 -6.2
Trade, Transportation & Utilities 226.2 -11.0 -5.8 -3.4
Government 160.8 -7.2 -4.1 0.4Professional & Business Svcs. 145.1 -7.9 -9.6 -6.9
Construction 101.6 -18.1 -25.3 -17.9
Educational & Health Srvs. 97.1 3.8 3.8 3.1
Financial Activities 59.4 4.1 -3.3 -5.6
Manufacturing 45.8 -5.1 -10.6 -7.3
Other Services 36.8 -9.3 1.1 -0.8Information 14.3 -14.6 -9.4 -5.2
Natural Resources & Mining 12.4 -17.4 -6.2 1.6
Major Declines in Construction/Real Estate, But National
Recession Affecting Tourism Employment As Well
Source: Bureau of Labor Statistics, March 2009
-8
-6
-4
-2
0
2
4
6
8
10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Industry Employment Growth: Leisure & Hospitality(year-over-year, monthly)
United States
Nevada
Nevada Foreclosure Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, September 2007
Nevada Data Maps
Distribution of Lending Volumes September 2007
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, September 2007
Areas Affected by Concentrated ForeclosuresSeptember 2007
Nevada Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, April 2008
Areas Affected by Concentrated ForeclosuresApril 2008
Nevada Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, November 2008
Areas Affected by Concentrated ForeclosuresNovember 2008
Nevada Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, February 2009
Areas Affected by Concentrated ForeclosuresFebruary 2009
Nevada Data Maps
Areas Affected by Concentrated ForeclosuresFebruary 2009
Las Vegas Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, February 2009
Areas with Concentrations of REO PropertiesFebruary 2009
Las Vegas Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, February 2009
Areas at Risk of Additional ForeclosuresFebruary 2009
Las Vegas Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, February 2009
Areas Affected by Concentrated ForeclosuresFebruary 2009
Reno Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, February 2009
Areas with Concentrations of REO PropertiesFebruary 2009
Reno Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, February 2009
Areas at Risk of Additional ForeclosuresFebruary 2009
Reno Data Maps
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations, February 2009
Loan Modifications and Repayment Plans Reach
Approximately 6,000 Distressed Borrowers a Quarter
Source: Hope Now Alliance Servicing Data, 4th Quarter 2008
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008
Num
ber
(Adju
sted f
or
Hope N
ow
Serv
icers
)
Nevada Loan Workouts
Repayment Plans Loan Modifications
Yet, Workouts Still Fall Short of Need
Source: Hope Now Alliance Servicing Data, 4th Quarter 2008
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Serious Delinquencies Foreclosure Starts Foreclosure Sales Repayment Plans Loan Modifications
Num
ber
(Adju
sted f
or
Hope N
ow
Serv
icers
)
Foreclosure & Delinquencies v. Loan Workouts in Nevada4th Quarter 2008
Conclusions
Conclusions
Multi-pronged strategy is needed to stem
foreclosure crisis
Continued foreclosure prevention efforts are critical
Foreclosure Prevention: Borrower Outreach, Refinance
and Loan Modification (including principal reduction)
Reaching these borrowers now may help to prevent
unnecessary foreclosures
Encourage borrowers to contact the Hope Hotline by calling
(888) 995-HOPE or visiting www.995hope.org
Conclusions
Other strategies that can help to mitigate the
negative impacts of foreclosure on families and
neighborhoods
Addressing vacant properties: ensuring that servicers
maintain properties
REO property disposition: return REO properties into
productive use, affordable housing
Ensuring continued access to credit and homeownership:
credit repair, financial education, responsible lending
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/
