mortgage market update september 17, 2010 – raleigh, nc

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


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


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


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


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


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


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


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%


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


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


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


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


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


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

mortgage market update september 17, 2010 – raleigh, nc

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