CFED Scorecard

CFED Assets & Opportunity Scorecard

Housing & Homeownership
High-Cost Mortgage Loans
Definition

Percentage of home purchase loans that are high cost, 2013.

Description

This measure describes the percentage of home purchase loans that have a significantly higher-than-average APR. Typically, lenders have targeted elderly, minority, and low-income families with these products, which put these families at greater risk of foreclosure and loss of home equity. The prevalence of these high-cost, or subprime, mortgage loans during the housing bubble of the mid-2000s led to the financial crash and subsequent recession. However, since the passage of the Dodd-Frank Act and the creation of the Consumer Financial Protection Bureau, new measures have been taken to prevent their spread.

7.1% of mortgage loans issued in United States are high-cost

High-Cost Mortgage Loans, 2013

StatePercent of Home Loans
that are High-Cost (%)
Rank
United States 7.1%
Alabama 7.2% 34
Alaska 2.2% 2
Arizona 9.9% 47
Arkansas 6.3% 30
California 7.1% 33
Colorado 5.4% 21
Connecticut 3.8% 10
Delaware 6.7% 31
District of Columbia 2.3% 3
Florida 8.2% 38
Georgia 7.3% 35
Hawaii 1.5% 1
Idaho 3.6% 8
Illinois 7.4% 37
Indiana 9.6% 45
Iowa 5.9% 27
Kansas 6.8% 32
Kentucky 9.5% 44
Louisiana 9.3% 43
Maine 4.0% 11
Maryland 5.0% 20
Massachusetts 2.5% 4
Michigan 11.4% 49
Minnesota 5.0% 19
Mississippi 8.4% 40
Missouri 8.6% 41
Montana 3.2% 5
Nebraska 4.7% 13
Nevada 11.7% 51
New Hampshire 4.8% 15
New Jersey 4.9% 16
New Mexico 9.8% 46
New York 3.6% 7
North Carolina 4.7% 14
North Dakota 5.9% 28
Ohio 7.4% 36
Oklahoma 9.9% 48
Oregon 3.8% 9
Pennsylvania 5.4% 23
Rhode Island 5.5% 24
South Carolina 5.6% 25
South Dakota 5.8% 26
Tennessee 8.9% 42
Texas 11.5% 50
Utah 6.2% 29
Vermont 3.4% 6
Virginia 4.6% 12
Washington 5.4% 22
West Virginia 8.3% 39
Wisconsin 4.9% 18
Wyoming 4.9% 17

Change in High-Cost Mortgage Loans

Percentage of High-Cost Mortgage Loans (%)
State2010201120122013
United States 2.47% 3.57% 3.35% 7.13%
Alabama 3.96% 4.20% 4.01% 7.24%
Alaska 0.95% 1.31% 0.81% 2.19%
Arizona 1.08% 3.13% 1.97% 9.88%
Arkansas 4.50% 3.86% 3.70% 6.32%
California 0.85% 3.08% 2.54% 7.08%
Colorado 0.88% 2.00% 1.19% 5.36%
Connecticut 0.74% 1.15% 1.00% 3.82%
Delaware 1.60% 1.45% 2.73% 6.70%
District of Columbia 2.14% 2.01% 1.23% 2.34%
Florida 2.33% 2.73% 3.18% 8.16%
Georgia 2.46% 3.25% 3.16% 7.32%
Hawaii 0.90% 0.93% 0.96% 1.48%
Idaho 1.59% 1.14% 0.72% 3.63%
Illinois 1.51% 3.50% 3.13% 7.43%
Indiana 2.19% 3.39% 3.86% 9.55%
Iowa 2.52% 3.74% 3.71% 5.85%
Kansas 2.94% 3.84% 4.05% 6.77%
Kentucky 4.20% 4.88% 7.06% 9.53%
Louisiana 5.29% 6.66% 4.65% 9.29%
Maine 2.29% 3.51% 2.56% 3.99%
Maryland 1.22% 1.12% 1.36% 4.98%
Massachusetts 0.49% 0.84% 0.83% 2.52%
Michigan 4.34% 5.55% 6.58% 11.42%
Minnesota 1.61% 2.30% 2.27% 4.95%
Mississippi 5.54% 6.20% 5.64% 8.39%
Missouri 2.84% 5.23% 4.56% 8.57%
Montana 1.85% 2.37% 1.97% 3.22%
Nebraska 2.72% 3.04% 2.79% 4.70%
Nevada 1.27% 5.38% 5.89% 11.67%
New Hampshire 0.90% 1.13% 1.49% 4.82%
New Jersey 0.95% 1.52% 1.73% 4.86%
New Mexico 2.25% 4.01% 4.54% 9.79%
New York 1.55% 1.87% 1.35% 3.58%
North Carolina 2.86% 7.10% 5.09% 4.71%
North Dakota 2.45% 2.61% 3.64% 5.94%
Ohio 2.19% 4.56% 4.03% 7.42%
Oklahoma 5.47% 5.80% 5.40% 9.92%
Oregon 1.09% 1.91% 1.21% 3.81%
Pennsylvania 2.23% 3.57% 2.33% 5.44%
Rhode Island 0.73% 1.63% 1.96% 5.51%
South Carolina 2.38% 1.96% 2.23% 5.55%
South Dakota 2.69% 3.95% 3.40% 5.76%
Tennessee 4.20% 5.22% 6.88% 8.92%
Texas 5.24% 5.82% 6.00% 11.52%
Utah 1.00% 1.14% 1.24% 6.19%
Vermont 1.98% 2.57% 2.18% 3.43%
Virginia 1.48% 1.41% 1.68% 4.59%
Washington 0.92% 1.72% 1.69% 5.37%
West Virginia 7.22% 6.18% 6.24% 8.27%
Wisconsin 1.67% 3.06% 2.53% 4.91%
Wyoming 2.31% 13.50% 2.41% 4.89%

Definition

Percentage of home purchase loans that are high cost, 2013.

High cost is defined as an interest rate spread of 1.5 percentage points for a first lien loan and 3.5 percentage points for a second lien loan between the loan’s APR and the estimated average prime offer rate. 

Source

Home Mortgage Disclosure Act. Washington, DC: Federal Financial Institutions Examination Council, 2013. Data accessed through PolicyMap.

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