I came across an interesting view of the nation's foreclosure picture. Literally, this post (from the Austin Real Estate Blog) illustrates the nation's distribution of subprime loans, foreclosures, and unemployment...and the interaction of the three. It's good stuff (the article, that is - not the story).
Map Showing how Subprime Loans, Foreclosures, and Unemployment Rates Interact
The graphic shows the concentration of subprime loans, along with the percentage of those subprime loans that resulted in foreclosure.
I'm curious, however, of what is considered a ‘sub-prime' loan in this and most current articles on the subject. Today anything that's not a conventional loan is tagged subprime, but there are many flavors of subprime: low credit, stated income, negative-amortization, no documentation, high loan-to-value ratio, multi-unit investment property....and the list goes on.
I would expect that a majority of the subprime loans in Florida and California are of the stated/no documentation, negative amortization, and investment variety. And in areas with affordable housing (such as Dallas and Houston), I'd expect a higher concentration of low credit loans. That said, the lower percentage of subprime mortgage foreclosures in Texas versus California and Florida is somewhat interesting. I wonder how this might be spun by those blaming our credit crisis on irresponsible home lending. Form this perspective-and if my assumptions about the distribution of types of subprime loans are somewhat accurate-it looks like the home price crisis came first.
View the original article here written by my business partner Johnny Schiro
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