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March 20, 2007

Will Subprime Issues Affect Seattle?

Subprime lender problems and bankruptcy have been all over the news this past week and I'm sure if you reading this you are, including myself, concerned if these major lender problems will create repercussions in our local real estate market. There is no doubt that with our high home costs and the risky loans that people take on in order to get themselves into a home can create a problem for our market if the majority of homes start going into foreclosure and flood the market with inventory. How much of a problem is it going to create I can't predict but I did find this information that can put a few items into prospective.

This information comes from Loan Performance, a California company that tracks nationwide mortgage activity and Elizabeth Rhodes of the Seattle Times:

"The Seattle area is in the bottom 20 percent for subprime mortgages among 331 major metropolitan areas — far below other parts of the country, particularly parts of Texas and California's Central Valley where subprime accounts for nearly a fifth or more of all mortgages. At the top of the list was McAllen, Texas, where some 26 percent of loans are subprime.

By comparison, only 7.9 percent of all Seattle-area mortgages were subprime at the end of 2006 (ranking 278th out of 331), down from 8.7 percent the previous year.

And only a fraction of those loans were in trouble — some 7.6 percent at the end of 2006 were 60 days late or more, a sign foreclosure is looming. This put Seattle in the bottom 10 percent.

By contrast, Cleveland and Detroit had a quarter of their subprime loans seriously overdue at the end of 2006. Corvallis, Ore., had the fewest seriously overdue — just 3 percent."

Posted by beaubetts at 10:50 AM | Comments (0) | TrackBack