Glennis McClure

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How Foreclosures Impact Our CommunityWhat
the Local Data SaysJune 25, 2008

Glennis McClure Senior Community Affairs
Advisor Federal Reserve Bank of Kansas City Omaha
Branch
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Omaha Subprime ReportKey Finding 1

• The largest percent of subprime originations for
  the Omaha area occurred in 2004 or earlier (36).
  Nationally subprime originations peaked in 2006
  at 38 percent.

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Omaha Subprime ReportKey Finding 2

• Over one half (54) of adjustable rate subprime
  loans in the Omaha area had reset as of December
  2007, versus 41 percent nationally and 34 percent
  in Tenth District.

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Omaha Subprime ReportKey Finding 3

• Omaha MSA delinquencies are only slightly higher
  than the national average with 26 percent of
  loans in delinquency as of December 2007,
  compared to 24 percent nationally.

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Omaha Subprime ReportKey Finding 4

• The average credit scores of the Omaha area were
  lower (610) than the nation (617). Omaha area
  subprime borrowers paid a 9.3 interest rate,
  above the 8.7 national average interest rate.

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Omaha Subprime ReportKey Finding 5

• Eighty percent of Omaha MSA subprime loans were
  fully documented, compared to the national
  average of 67.
• As of December, 2007, outstanding subprime
  mortgage was 110,181, well below the US average
  mortgage balance of 181,225.

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Federal Reserve Bank Resources
www.kansascityfed.org
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Impacts Homeowners Loss of equity (maybe) and
credit worthiness Where do we live (affordable
housing issues) Communities External price
effects Neighborhood deterioration Homelessness
/ lack of affordable housing Local budgetary
impact (expenditures and revenues) Financial
Markets Losses to investors (e.g., pension
funds) Mark to market and capital loss recovery
reserves Tighter underwriting standards