TRENDS IN DELINQUENCIES AND FORECLOSURES IN SOUTHERN CALIFORNIA

Transcription

1 TRENDS IN DELINQUENCIES AND FORECLOSURES IN SOUTHERN CALIFORNIA September 2010 Community Development Research Federal Reserve Bank of San Francisco

2 National Trends According to John Williams, Director of Research at the FRBSF, the economic outlook is for a slow and modest recovery Unemployment still a major concern, and unlikely to see significant drops in the unemployment rate in the next year While the housing market appears to be stabilizing, recovery is muted, and construction starts and home sales are both down in the most recent period Growth of real gross domestic product (GDP), the broadest measure of the strength of the economy, is hovering around 2 percent in the current quarter Large shadow inventory of properties in delinquency or some stage of the foreclosure process also remains a concern

3 National Trends

4 Unemployment continues to hover around 10% 12 U.S. Unemployment Rate 10 Unemployment Rate Recession Source: Bureau of Labor Statistics, September 2010

5 Depth of this economic downturn eclipses past recessions Months of Recession 0% Percent Decline in Employment from Peak -1% -2% -3% -4% -5% -6% %

6 Case-Shiller shows tepid housing recovery Case-Shiller National House Price Index (2000 = 100, Quarterly) Source: Case - Shiller Home Price Index

7 FHFA House Price Index continues to fall, reflecting activity at lower end of market 170 FHFA (formerly OFHEO) House Price Index (2000=100, quarterly) 160 FHFA House Price Index 2000= Source: Federal Housing Finance Agency (formerly OFHEO)

8 Overall delinquencies drop, but still more than 4.5 million homes in distress 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Loans in Foreclosure All Mortgages Past Due Source: Mortgage Bankers Association, National Delinquency Survey

9 HAMP modifications down slightly in July; borrowers still face challenges in obtaining permanent modifications 120, ,000 Loan Modifications 80,000 60,000 40,000 20,000 0 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 New HAMP Trials Started New Permanent Modifications Started Source: HAMP Service Performance Report Through July 2010

10 California Trends

11 California s unemployment drops slightly, but still well above national average Unemployment Rate 8 6 California 4 United States Source: Bureau of Labor Statistics Recession

12 Unemployment rates particularly high in Central Valley and Inland Empire Source: Bureau of Labor Statistics, July 2010

13 California house prices appear to be stabilizing FHFA (formerly OFHEO) House Price Index (2000=100, quarterly) California FHFA House Price Index 2000= United States Source: Federal Housing Finance Agency (formerly OFHEO)

14 Southern CA MSA house prices seem to be stabilizing FHFA House Price Index: Southern California (2000 = 100, quarterly) Inland Empire FHFA House Price Index 2000= San Diego Los Angeles Source: Federal Housing Finance Agency (formerly OFHEO)

15 The number of distressed properties delinquent and in foreclosure has dropped slightly 800, , , , , , , , Loans in Foreclosure: California All Mortgages Past Due: California Source: Mortgage Bankers Association, National Delinquency Survey

16 State & Local Data Maps

17 California Data Maps Areas Affected by Concentrated Foreclosures February 2010 Source: Lender Processing Services Inc. Applied Analytics

18 California Data Maps Areas Affected by Concentrated Foreclosures July 2010 Source: Lender Processing Services Inc. Applied Analytics

19 California Data Maps Areas at Risk of Additional Foreclosures July 2010 Source: Lender Processing Services Inc. Applied Analytics

20 Source: Lender Processing Services Inc. Applied Analytics Los Angeles Metro Region Data Maps Areas Affected by Concentrated Foreclosures February 2010

21 Source: Lender Processing Services Inc. Applied Analytics Los Angeles Metro Region Data Maps Areas Affected by Concentrated Foreclosures July 2010

22 Source: Lender Processing Services Inc. Applied Analytics Los Angeles Metro Region Data Maps Areas at Risk of Additional Foreclosures February 2010

23 Source: Lender Processing Services Inc. Applied Analytics Los Angeles Metro Region Data Maps Areas at Risk of Additional Foreclosures July 2010

24 Source: Lender Processing Services Inc. Applied Analytics Orange County Data Maps Areas Affected by Concentrated Foreclosures February 2010

25 Source: Lender Processing Services Inc. Applied Analytics Orange County Data Maps Areas Affected by Concentrated Foreclosures July 2010

26 Source: Lender Processing Services Inc. Applied Analytics Orange County Data Maps Areas at Risk of Additional Foreclosures February 2010

27 Source: Lender Processing Services Inc. Applied Analytics Orange County Data Maps Areas at Risk of Additional Foreclosures July 2010

28 Source: Lender Processing Services Inc. Applied Analytics Inland Empire Regional Data Maps Areas Affected by Concentrated Foreclosures February 2010

29 Source: Lender Processing Services Inc. Applied Analytics Inland Empire Regional Data Maps Areas Affected by Concentrated Foreclosures July 2010

30 Source: Lender Processing Services Inc. Applied Analytics Inland Empire Regional Data Maps Areas at Risk of Additional Foreclosures February 2010

31 Source: Lender Processing Services Inc. Applied Analytics Inland Empire Regional Data Maps Areas at Risk of Additional Foreclosures July 2010

32 Source: Lender Processing Services Inc. Applied Analytics San Diego Regional Data Maps Areas Affected by Concentrated Foreclosures February 2010

33 Source: Lender Processing Services Inc. Applied Analytics San Diego Regional Data Maps Areas Affected by Concentrated Foreclosures July 2010

34 San Diego Regional Data Maps Neighborhoods at Risk of Additional Foreclosures February 2010 Source: Lender Processing Services Inc. Applied Analytics

35 San Diego Regional Data Maps Neighborhoods at Risk of Additional Foreclosures July 2010 Source: Lender Processing Services Inc. Applied Analytics

36 Conclusions

37 Continued Need for Foreclosure Prevention Important to reach borrowers with preventable foreclosures Borrower Outreach Events Create a foreclosure prevention workbook -- for an example see Arizona s: Making Homes Affordable Federal program provides both loan modification and refinance options Online form available that allows borrowers to assess if they qualify for the program

38 Preventing Foreclosure Scams Foreclosure scams are proliferating, especially in markets with investor interest Some counties are sending notices to all delinquent borrowers to warn them about foreclosure scams Free media kit available from the Federal Reserve which includes a PSA and other resources: NeighborWorks PSA: Other 5 Tip brochures and resources available from the Federal Reserve FDIC Brochure:

39 Stabilizing Communities and Helping Families After Foreclosure Develop service delivery and resources for families who go through foreclosure Rental housing assistance Credit repair Minimizing disruption for children (e.g. allowing them to finish the school year in their old school) Minimize negative spillover effects of vacant properties on surrounding neighborhood Ensure servicer maintenance of REOs Work with lenders/servicers to acquire and rehab foreclosures for affordable housing

40 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