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Volume 8, Issue 2, 2008   Federal Reserve Bank of Dallas

Subprime Mortgage Performance by Metro Area

There is substantial variation in loan performance within Texas, according to the April 2008 LoanPerformance report. Figure 1 shows the distribution of securitized, owner-occupied subprime mortgages in 20 Texas metropolitan areas. The Dallas–Fort Worth–Arlington metropolitan area had almost 76,000 and the Houston–Sugar Land–Baytown metropolitan area had almost 49,000 securitized, owner-occupied subprime mortgages.

Figure 1: Securitized, owner-occupied subprime loans  of 20 Texas metros

These two metropolitan areas also had a much larger number of problematic loans compared with other metros in Texas. Figure 2 shows the number of securitized, owner-occupied subprime mortgages that were 90 days past due, in process of foreclosure or were real estate-owned properties in Texas metropolitan areas in the April 2008 LoanPerformance report. The percentage of seriously delinquent subprime mortgages was 16 percent in Dallas–Fort Worth–Arlington and 15 percent in Houston–Sugar Land–Baytown, slightly higher than the state level of 14 percent.

Figure 2: Serious delinquencies and REOs of securitized subprime loans in Texas metros

Variable-rate loans' share of all securitized, owner-occupied subprime mortgages in Dallas–Fort Worth–Arlington was higher than that in Texas (52 percent versus 46 percent). Houston–Sugar Land–Baytown had a higher percentage of ARM loans that were already reset compared with the state as a whole (60 percent versus 57 percent).

—Wenhua Di

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About the Author

Wenhua Di is a community affairs economist at the Federal Reserve Bank of Dallas.

e-Perspectives, Volume 8, Issue 2, 2008

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The views expressed are the authors' and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Articles may be reprinted on the condition that the source is credited and a copy is provided to the Community Development Office.
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