Dr. Gobar will be visiting Oklahoma to present the results of her research in full.  She will be speaking Wednesday night, March 15th at the Oklahoma City Memorial Museum and Thursday night March 16th at the Mayo Hotel in Tulsa.  Click here to RSVP and view more information about these events and here for a presentation on the racial wealth gap.

The boom in subprime mortgage lending in the early 2000s is widely recognized as the underlying cause of the country’s recent financial crisis and subsequent Great Recession.  Subprime mortgages are loans offered at interest above the prime rate.  When millions of homeowners began to default on their high-interest subprime mortgages in 2007, the bottom fell out of the housing market.  This set off a chain reaction that threatened the nation’s largest financial institutions, who had sunk trillions into unsustainable mortgages on overvalued properties.  Much of the blame falls on the financial institutions themselves, whose predatory practices and reckless behavior has since been scrutinized and rejected.

This post examines the subprime lending boom in Oklahoma, where the housing market continues to outshine harder-hit states.  In many other states (particularly Arizona, Nevada, Florida, and California), widespread foreclosures and plummeting home values have hampered economic recovery.  How bad was the housing crisis in Oklahoma?  The following data are from a research paper by Dr. Angela Gobar sponsored by Howard University’s Center on Race and Wealth.  Dr. Gobar’s paper, which you can view here, analyzed mortgage loans originated in Tulsa and Oklahoma City during and after the subprime lending boom.  The two ‘metropolitan statistical areas’ examined in the paper contain 60 percent of the state’s population and are representative of the housing market overall.

Oklahoma City and Tulsa experienced their largest volume of subprime lending as well as their widest interest rate spread during 2006.  For both Tulsa and Oklahoma City, the average rate spread between a prime and a subprime mortgage loan peaked at 5 percentage points in 2006.  So for instance, if the average prime mortgage was offered at 5 percent, then the average subprime mortgage loan was financed at 10 percent.  The total volume of subprime lending soared between 2004 and 2006 and likely displaced much of the market’s prime lending activity, which plummeted during that same period. Read the rest of this entry »

As home foreclosures continue to rise across the United States, loan modification scams are increasing at an alarming rate. Loan modification scams in Oklahoma have a devastating impact on families and communities.  A free luncheon event, “Loan Modification Scam Alert Summit” in Tulsa on Friday, April 8 from 11:30 -2:00pm will shed some light on the growing problem and share tools and resources to help combat loan scams.

The summit is sponsored by the Federal Deposit Insurance Corporation, the Federal Reserve Bank of Kansas City’s Oklahoma City Branch, NeighborWorks America, the Oklahoma Homebuyer Education Association and Oklahoma Assets.  The summit will provide you with:

• Knowledge of foreclosure and loan modification scams,
• Tools and resources to protect you and your community, and
• Opportunity to network with service providers and community leaders engaged in this effort

The hosts encourage elected officials, community and faith-based leaders and housing agency representatives to support solutions that are reducing the devastating impact loan modification scams are having in Oklahoma.  The event will be held at the Oklahoma Jazz Hall of Fame in downtown Tulsa on April 8 from 11:30 -2:00pm.  RSVP to Emerson Hall at Emhall@fdic.org by Thursday, March 31. Due to space limitations, pre-registration is required.

The latest Numbers You Need, our monthly bulletin of key economic and budget trends and data, reflects continued, if modest, progress on the job front and improved state revenue collections. Previously we reported decent growth in state personal income for the first quarter of 2010.  However, even as the Great Recession starts to recede,  the stubbornly dark cloud in the economic sky continues to be  foreclosures. Read the rest of this entry »