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The Fed Gets "Visual"
They Show A Lot, But Don't Forget What You CAN'T See
If you've wanted to see precisely how widespread the subprime debacle has become, I came across an online tool today that can give you a pretty good idea. And it really is precise: you can see the picture on a national level, or drill down to data for states, counties, and even ZIP codes.
At each of these levels, the tool will report on a dozen categories of data regarding subprime conditions, from the share of subprime mortgages "90+ days delinquent" to the share of late payments in the past 12 months to the share that comprise "low/no doc" loans.
As for the source of this information, it comes courtesy of the Federal Reserve Bank. The "Dynamic Maps" it presents have an accompanying "Technical Appendix" and other supporting data. I will say that the tool is easy to use and eye-opening indeed. I looked at the subprime data for my ZIP code -- which has had a relatively stable real estate market about an hour north of Atlanta -- and compared it to a ZIP code in Ft. Lauderdale, FL where I had lived for many years.
But, the "stable" place where I live now is not as different as I had expected from "troubled" South Florida. While the subprime mortgages in the Ft. Lauderdale ZIP do represent a higher overall percentage share, the condition of the subprime loans north of Atlanta are worse in several ways -- such as a higher percentage 90+ days late, a higher share with late payments in the past 12 months, higher loan-to-value ratio, lower FICO scores, etc. From a lender's (etc.) perspective, it's not really obvious to me which set of problems is "better" than the other.
Now, what you do see from the Dynamic Maps may be eye-opening, yet I need to emphasize an important fact about what you don't see in the data. Look at the fine print and you'll notice how the Fed says that between 25%-50% of the total subprime mortgage loans do NOT appear in the figures. This is not to criticize the Fed's tool, they did the best they could. Yet the obvious point is that it all amounts to an underestimate of the severity of the problem.
The link is: http://www.newyorkfed.org/mortgagemaps/
I would say "have fun," but there's nothing amusing about it. Please return here afterward, and consider a subscription that will show you where we see the trend going next.
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