1. TRENDS IN DELINQUENCIES
AND FORECLOSURES IN
OREGON
January 2010
Craig Nolte, Community Development Department,
Federal Reserve Bank of San Francisco

2. National Trends
 Signs that the economy is starting to grow and move
out of the recession
 GDP positive for the first time since start of 2008
 Major weaknesses still exist in the housing, labor,
and credit markets
 Foreclosures continue to rise
 Although the HAMP program has succeeded in reaching
728,408 distressed borrowers (as of November 2009),
few of these modifications have been made permanent
and scale still falls significantly short of need.

3. National Trends

4. GDP Shows Positive Growth in
3rd Quarter 2009
Real Gross Domestic Product
(percent change at seasonally adjusted annual rate)
10.0
8.0
6.0
4.0
GDP % change
based on 2.0
chained 2005
dollars 0.0
-2.0
-4.0
-6.0
-8.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Bureau of Economic Analysis

5. Weakness in Labor Market Grave Concern
U.S. Unemployment Rate
12.0
10.0
8.0
Unemployment Rate
6.0
4.0
2.0
0.0
1989 1993 1997 2001 2005 2009
Recession
Source: Bureau of Labor Statistics, December 2009

6. Dramatic Increase in
Duration of Unemployment
Median Duration of Unemployment
25
20
Weeks
15
10
5
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Bureau of Labor Statistics

7. Case-Shiller Shows Continued Uptick
in House Prices in 3rd Qtr 2009
Case-Shiller National House Price Index
(2000 = 100, quarterly)
200
180
160
140
120
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Case - Shiller Home Price Index

8. FHFA Shows Continued Declines, Reflecting
Activity at Lower End of Market
FHFA (formerly OFHEO) House Price Index
(2000=100, quarterly)
170
160
150
FHFA House Price Index
140
2000=100
130
120
110
100
90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Federal Housing Finance Agency (formerly OFHEO)

9. National Foreclosure Rate Remains High
National Foreclosures Starts
Percent of All Loans
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2000 2002 2003 2004 2005 2006 2007 2008 2009
Source: Mortgage Bankers Association, National Delinquency Survey

10. Concern that Upcoming Resets will
Continue to Drive New Foreclosures
Monthly Mortgage Rate Resets
(first reset in billions of US dollars)
Source: Credit Suisse: Assessing Risks to Global Financial Stability, p. 8.
http://www.imf.org/external/pubs/ft/gfsr/2007/02/pdf/chap1.pdf

11. Loan Modifications:
Home Affordable Modification Program
200,000
180,000
160,000
140,000
Loan 120,000
Modifications
100,000
80,000
60,000
40,000
20,000
0
Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09
New HAMP Trial Plans Offered to Borrowers New HAMP Active Trial and Permanent Modifications
Source: HAMP Service Performance Report Through Nov. 2009:
http://www.financialstability.gov/docs/MHA%20Public%20121009%20Final.pdf

12. Although there are Signs of Improvement, Small
Businesses Still Face a Tightened Credit Market
Senior Loan Officer Opinion Survey on Bank Lending:
Net Percentage of Domestic Respondents Tightening
Standards for C&I Loans
100
80
60
40
20
0
-20
-40
2001 2002 2003 2004 2005 2006 2007 2008 2009
Medium and Large Businesses Small Businesses

13. Oregon Trends

14. Unemployment Rate in Oregon Fell in 3rd
Qtr. 2009
14.0
12.0
10.0
Unemployment Rate
8.0
Oregon
6.0
United States
4.0
2.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Recession
Source: Bureau of Labor Statistics

15. Oregon Seeing Softening of Real Estate Market
FHFA House Price Index (formerly OFHEO)
(2000=100, quarterly)
190
Oregon
180
170
FHFA House Price Index
160
United States
2000=100
150
140
130
120
110
100
90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Federal Housing Finance Agency (formerly OFHEO)

16. Bend Experiencing Steepest Decline in House
Prices
FHFA House Price Index (formerly OFHEO)
(2000=100, quarterly)
250
230
Bend
210 Medford
FHFA House Price Index
2000=100
190
Portland
170
Salem
150
130
110
90
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Federal Housing Finance Agency (formerly OFHEO)

17. Low Tier Has Seen Greatest Changes in
House Prices
Tiered Case- Shiller Home Price Index: Portland
(2000 = 100)
250.00
200.00
150.00
100.00
Low Tier Middle Tier Upper Tier
50.00
0.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Case - Shiller Home Price Index

18. Oregon Saw a Continued Increase in Foreclosure Starts
in 3rd Quarter 2009
Oregon Foreclosure Starts
(Percent of All Loans)
1.2
Foreclosure Starts (Percent of Loans)
1.0
0.8
0.6
0.4
0.2
0.0
2005 2006 2007 2008 2009
Source: Mortgage Bankers Association, National Delinquency Survey

19. Growing Concerns over Sustainability of Loans with
Payment Options (in subprime, prime and Alt-A markets)
Characteristics of Remaining "Current" Loans
9
8
7
Percent of Total Current Loans
6
5
4
3
2
1
0
Interest Only Jumbo Option Arm
United States Oregon

20. Oregon Foreclosure Data Maps

21. Oregon Data Maps
Areas Affected by Concentrated Foreclosures
February 2008
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

22. Oregon Data Maps
Areas Affected by Concentrated Foreclosures
November 2008
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

23. Oregon Data Maps
Areas Affected by Concentrated Foreclosures
November 2009
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

24. Portland Area Data Maps
Areas Affected by Concentrated Foreclosures
June 2009
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

25. Portland Area Data Maps
Areas at Risk of Additional Foreclosures
June 2009
Source: Lender Processing Services Inc. Applied Analytics & FRBSF Calculations

26. Conclusions

27. 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:
http://www.pima.gov/current/2008_November%20English%20Workbook.pdf
 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
 http://makinghomeaffordable.gov/eligibility.html

28. 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:
http://www.federalreserveeducation.org/pfed/mediakit.cfm
 NeighborWorks PSA: http://www.youtube.com/nwpad
 Other 5 Tip brochures and resources available from the
Federal Reserve
http://www.federalreserve.gov/consumerinfo/fivetips.htm

29. 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

30. 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
http://www.frbsf.org/community/