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High-Cost Mortgage Loans Reports & Graphics

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 CFPB, new measures have been taken to prevent their spread. 

High-Cost Mortgage Loans, 2011

StatePercent of Home Loans
that are High-Cost (%)
Rank
United States  3.57%   
Alabama  4.20%  38 
Alaska  1.31% 
Arizona  3.13%  27 
Arkansas  3.86%  35 
California  3.08%  26 
Colorado  2.00%  17 
Connecticut  1.15% 
Delaware  1.45%  10 
District of Columbia  2.01%  18 
Florida  2.73%  23 
Georgia  3.25%  28 
Hawaii  0.93% 
Idaho  1.14% 
Illinois  3.50%  30 
Indiana  3.39%  29 
Iowa  3.74%  33 
Kansas  3.84%  34 
Kentucky  4.88%  40 
Louisiana  6.66%  49 
Maine  3.51%  31 
Maryland  1.12% 
Massachusetts  0.84% 
Michigan  5.55%  44 
Minnesota  2.30%  19 
Mississippi  6.20%  48 
Missouri  5.23%  42 
Montana  2.37%  20 
Nebraska  3.04%  24 
Nevada  5.38%  43 
New Hampshire  1.13% 
New Jersey  1.52%  11 
New Mexico  4.01%  37 
New York  1.87%  14 
North Carolina  7.10%  50 
North Dakota  2.61%  22 
Ohio  4.56%  39 
Oklahoma  5.80%  45 
Oregon  1.91%  15 
Pennsylvania  3.57%  32 
Rhode Island  1.63%  12 
South Carolina  1.96%  16 
South Dakota  3.95%  36 
Tennessee  5.22%  41 
Texas  5.82%  46 
Utah  1.14% 
Vermont  2.57%  21 
Virginia  1.41% 
Washington  1.72%  13 
West Virginia  6.18%  47 
Wisconsin  3.06%  25 
Wyoming  13.52%  51 

Definition

Percentage of home purchase loans that are high cost, 2011.

 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 rate offer. 

Source

Home Mortgage Disclosure Act. Washington, DC: Federal Financial Institutions Examination Council, 2012. Data accessed through PolicyMap.

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