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A blog about the economy and the Sacramento-area real estate market.

June 17, 2009
Growing trouble with prime loans
I was going through the state Department of Corporation's newest quarterly report (Q1-2009) for lenders' loan modification activities and this jumped out at me: The number of workouts initiated for prime loans is rising fast, mirroring rising unemployment in California.

The data come from lenders that report to the state as part of Gov. Arnold Schwarzenegger's Nov. 2007 Subprime agreement. These lenders service about 3.3. million loans in California, about half the state's total.

Here is a look at prime workouts initiated since last July. (All these charts are available here).

July             20,779
Aug.            22,069
Sept.           20,017
Oct.            25,758
Nov.            30,632
Dec.             39,963

Jan.             34,700
Feb.             38,748
March           42,383

Alt-A trouble is also rising. Here's a look at those numbers. Alt-A's were commonly given to people who were self-employed and didn't state their income. They're a loan somewhere between subprime and prime on the risk scale. Number of workouts initiated by lenders:

July      4,017
Aug.     4,554
Sept.    4,631
Oct.     5,094
Nov.     5,151
Dec.    6,658
Jan.     9,156
Feb.    10,005
March   11,920

Subprime, by the way, seems to be leveling off in the number of workouts initiated.

July          52,892
Aug.         51,018
Sept.        50,688
Oct.         57,180
Nov.         56,787
Dec.         64,642
Jan.          74,28
Feb.         80,044
March       57,665

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