Subprime nation
October 4th, 2008, 3:00 am · 8 Comments · posted by Ronald Campbell
Orange County may have been home to the largest subprime lenders in the country, but to really see subprime lending in action you have to go elsewhere:
- To traditionally poor areas like the Rio Grande Valley in Texas and to parts of Arkansas, Louisiana and Mississippi.
- To fast-growing exurbs and paved-over farmland like the Inland Empire and the San Joaquin Valley.
- And to two of the hottest centers of the late housing boom, Nevada and Florida.
We’re looking today at geographic patterns in home lending. Our source is the Fed’s Home Mortgage Disclosure Act database.
Since 2004 the Fed has required lenders in their HMDA reports to break out loans carrying interest rates at least 3 percentage points higher than the comparable Treasury bill. The Fed believes these high-priced loans are equivalent to subprime and Alt-A loans, though the industry defines those loan categories by credit scores, not interest rates.
Here are maps showing subprime volume as a percentage of all home loan volume by county and by year. The scale is the same for every map: yellow where subprime is 20 percent or less of total volume, green for 20 percent to 30 percent, light blue for 30 percent to 40 percent and dark blue where the subprime volume exceeds 40 percent.
The patterns are striking. In 2004 subprime was big in only a few areas of the country, most notably Texas and the Deep South. By 2005 it had built strongholds in Riverside and San Bernardino counties and especially in the San Joaquin Valley. By 2006 subprime was everywhere. But in 2007, when big players like Irvine-based New Century abruptly collapsed, the subprime wave rolled back.
Click on the thumbnails to see larger maps.
2004
2005
2006
2007
2004-2007 summary
Coming next week: a closer look at California.
Here’s more of our coverage of the mortgage meltdown:
- JPMorgan buys seized WaMu, deposits are safe
- WaMu to slash money for loan losses
- Washington Mutual ousts CEO, reaches deal with regulator
- O.C. financial stocks hit after busted bailout
- Oil under $100, O.C. energy stocks hit
- O.C. mortgage rates dip amid turmoil
- Citigroup buying Wachovia banking operations
- WaMu’s odd subprime timing
- Subprime’s dearly departed
- Bailout bill could save Downey
October 4th, 2008 at 4:32 pm
red state correlation
October 4th, 2008 at 10:40 pm
Fascinating maps, thanks Matt!
October 5th, 2008 at 7:44 am
everyone who bought in the OC betwen 2004 and 2008 is now a subprime credit risk
everyone who HELOCed bubble equity like a drunken sailor is also now subprime
responsible people are now charged with cleaning up the mess from the drunken free money orgy
as home prices continue to drop, more and more people in the US will become a subprime credit risk
our government has very little control over interest rates
our government can only delay the inevitable
short term manipulation of interest rates will impact our country for years
October 5th, 2008 at 8:44 am
What caused the current economic crisis…
http://www.youtube.com/watch?v=3EyKiOE78yU
October 5th, 2008 at 9:31 am
i have read much about freddie and fannie failing. this is the story the public needs to know. freddie and fannie were pushed to make big subprime purchases by Clinton. Clinton passed CRS. CRS forced banks and wall street to loan to people who could not afford homes. this was the law. lots of money. the democrats blocked Bush from curtailing CRS. fannie and freddie pushed at least a trillion of this stuff all over the world. this is bringing down the global banking system. now obama gets on the stage and blames the bush economic policies for our a depression that is in the works. he blames wall street. obama, you are a liar. the american people must get this entire story told to them before the election.
October 5th, 2008 at 6:27 pm
CRS? huh? Elaborate please, trs.
October 5th, 2008 at 9:02 pm
These maps are fabulous. This mess is not about Clinton and poor people getting into homes. This is housing collapse is purely about profit and an administration ’sdesire to grow the domestic economy in the only way possible. Unfortunately they beleived their own propaganda. This bubble was massive and we wlll never be as wealthy and as prosperous again.
We are all now paying he price.
October 11th, 2008 at 6:27 pm
trs Says:
October 5th, 2008 at 9:31 am
“i have read much about freddie and fannie failing. this is the story the public needs to know. freddie and fannie were pushed to make big subprime purchases by Clinton. Clinton passed CRS. CRS forced banks and wall street to loan to people who could not afford homes. this was the law. ”
——-
You “my friend” are completely misinformed. it was the CRA (Community reinvestment Act and it was passed in 1977. It did not force any bank to do anything. CRA banks only issued 20% of ALL subprime loans and have a lower default rate than other lenders - here is the info you need:
http://www.house.gov/apps/list/hearing/financialsvcs_dem/barr021308.pdf.
http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis