Bad Credit Mortgage Loans & Foreclosures: By the Numbers

The Center for American Progress released a report this month entitled “From Boom to Bust: Helping Families Prepare for the Rise in Subprime Mortgage Foreclosures.”

The report and graphic below (follow the link above for the full report) outlines the problems that some homeowners are currently facing and details policy solutions that would help families deal with the crisis.

The numbers underscore the bad credit mortgage loan problems faced by U.S. home loan borrowers and show that we must act now to create policies that will help protect American families as they grapple with subprime mortgages.

FAMILIES AT RISK

2.2 million: Approximate number of families who may lose their homes and up to $164 billion of accumulated wealth due to foreclosure.

1.2 million: Number of foreclosure filings in 2006. This number is up 42 percent from 2005.

700: Percentage increase in foreclosures from 2005 to 2006.

13: Percentage of outstanding mortgages accounted for by subprime loans.

20: Percentage of borrowers surveyed who face foreclosure due to predatory loan terms and multiple mortgage refinance transactions.

1 in 5: Number of subprime borrowers in recent years who could have qualified for a lower-cost conventional mortgage.

URBAN VS. RURAL

26.8: Percentage of subprime mortgages in McAllen, Texas — the metropolitan area with the highest percent of subprime home loans.

17.4: Percentage of rural mortgage loan originations that were classified as High APR Loans. This exceeds both the urban percentage of 15.5 percent and the national percentage of 15.6 percent.

20: Rural subprime borrowers were 20 percent more likely than urbanites to take out a mortgage with a prepayment penalty with a term of five years or more.

63: Percentage of rural subprime mortgage loans that imposed prepayment penalties on borrowers with a two-year penalty period.

500: Number of rural counties (most in central and southern regions) where one-third or more of all mortgage originations were for High APR Loans. These high rates of High APR Loans occur overwhelmingly in counties with persistent poverty rates of 20 percent or more.

DISCRIMINATION

1/2: The proportion of rural counties with significant rates of high-cost loans — 30 percent or more — with minority populations of 33 percent or more. Most of these are counties across the Mississippi Delta, with Native American reservations and poor Hispanic American communities.

3: Factor by which black and Hispanic borrowers are more likely to receive subprime [bad credit mortgage loans] than white borrowers, even when taking into account the credit score.

70: Percent of black Americans in places such as Boston earning between $92,000 and $152,000 who received high-interest loans in 2005. Just 17 percent of whites living in the same areas received such loans.

ARTICLE & GRAPHIC SOURCE: Center for American Progress