Tuesday, March 18, 2008

Mortgage Troubles Concentrated, Not Widespread

The Mortgage Bankers Association recently released mortgage delinquency and foreclosure data at the state level for the fourth quarter 2007. As the maps above show, most of the delinquency and foreclosure troubles are concentrated in 12 states for each category.

For serious delinquencies, the states with the biggest problems are
Michigan (8.97%), Indiana (8.35%), Florida (7.47%) and Nevada (6.53%), compared to the national average of 5.82%. Some of the states with the lowest delinquency rates include Wyoming (3.1%), Montana (3.2%) and Washington (3.2%).

States with the highest foreclosure start rates include Nevada (1.54%), Florida (1.46%) and Michigan (1.29%), and states with the lowest rates include Montana (.27%) and Wyoming (.29%), compared to the national average of .83%.

Comment: The worst of the mortgage delinquency and foreclosure troubles seem to be pretty concentrated in a small number of states (Nevada, Florida, Michigan, Ohio and Indiana), while the rest of the country is probably at normal levels for delinquencies and foreclosures. The data and maps above suggest that delinquency and foreclosure problems are certainly not as widespread of a problem as many think.


At 3/19/2008 7:07 AM, Anonymous Anonymous said...

The 12 states highlighted on map 1 account for about 40% of the U.S. population. If by concentrated, not widespread, you mean less than 50%, then technically you are correct. Just slightly reduce the lower bound of the middle grouping on map 1 and the picture would be different.

Query: Why did the Mortgage Bankers Association prepare the groupings in the way that they did? It wouln't be spin, would it?

At 3/19/2008 7:25 AM, Anonymous Anonymous said...

Any idea why Las Vegas is doing so poorly?

At 3/19/2008 1:00 PM, Blogger Grouchy Chris said...

How is it that in Map 1, the Upper Peninsula is still part of Michigan, but by Map 3, it has seceded?

At 3/19/2008 3:22 PM, Anonymous Anonymous said...

It should be noted that these stats come from incomplete data.

The real picture may be better or worse than portrayed.

At 3/19/2008 5:55 PM, Anonymous Anonymous said...

Anon. 7:07,

What you are suggesting is that all of the residents of these 12 states are having mortgage problems ie. 40% of the U.S. population.

We know that foreclosure are around 8.75% of all borrowers from a previous post. How do you get from 8.75% to 40% of the American population?

And the banks the ones doing the spinning...right!

At 3/20/2008 5:59 AM, Anonymous Anonymous said...

Anon 5:55,

No, I didn't suggest that. Your ideology is trumping your reading comprehension.

Perry is asserting that mortgage troubles are concentrated geographically (otherwise why use a map), not widespread. The troubles are concentrated in 12 states but 40% of the US population resides in those states.

I don't have the raw data to determine why the 3 groupings for delinquency and foreclosure rates were tabulated at specific break points to 2 decimal points. Seems a tad suspicious to me. The MBA is a trade/lobbying association; it will spin (massage the data) for its members.

At 3/20/2008 7:46 AM, Anonymous Anonymous said...

Click here for a Q4.07 Wall Street Journal delinquency analysis by metropolitan area.

At 3/20/2008 10:33 PM, Anonymous Anonymous said...

Yeah...and the credit crisis is concentrated. Facts are so inconvenient when you believe something else. Reverse engineering.


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