It’s said that Texas is weathering the recession better than most states. Though it does have a big state budget crisis like many other states do now, the state of its mortgage banking industry is better than most.
What’s Texas like in mortgages? According to the Texas Mortgage Bankers Association, Texas is the leader, by far, in number of Federal Housing Administration mortgages (672,000 vs. 392,000 for runner-up California). It has 3.1 million loans currently being serviced, with total equity of $183.4 billion. It has $602 billion in total property value, and the average mortgage averages 70% loan-to-value there. Its home values have dropped by just 4.6% between 2006 and 2009, while the national average has been close to 30%. And its average FICO score of 670 is not far below the U.S. average of 692.
The state’s 1.82% foreclosure rate places it seventh lowest in the country, and it is lodged in with other states (North Dakota, Alaska, Wyoming) with just a fraction of the number of loans serviced in Texas. Delinquencies in Texas dropped in the third quarter of 2010, according to TMBA president Scott Norman, in all three categories. Compare its 1.82% foreclosure rate to those of its big-state peers: New York is 4.74%, California 4.42% and Florida is a whopping 13.68%.
Norman said some of the stability in homeownership in the Lone Star State can be attributed to its “homesteading” past, which has encouraged Texans to stay in their homes more than other, more peripatetic Americans. There are 5.46 million owner-occupied homes in Texas, and 1.38 million of those belong to those 62 and older.
Texans also have a comparably low share of subprime mortgages. With an FHA/VA share of 27.5% and a prime share of 61.9%, that leaves just 10.6% in subprime mortgages. In subprime foreclosures, Texas holds up pretty well as well. Its 6.5% rate matches favorably with New York (17.5%), California (13.4%), Florida (29.8%) and the U.S. as a whole (13.7%).
Not all the news from Texas is good. The state has been hit with significant job losses in the mortgage sector. Individual mortgage licensees (mortgage brokers and bankers) have declined by two-thirds, from 29,687 in 2004 to 9,897 currently. And RealtyTrac just reported that for 2010, Texas had more than 100,000 foreclosure notices. (There can be more than one foreclosure notice on a property, so this number doesn’t equate with the number of actual foreclosures.) All in all, though, Texas seems to be doing pretty well.
