Title supposed to have read: OKC banks in a time of national banking crisis

This thread was inspired by a recent post in another thread. But I though it desrved its own threas as it is a topic of great importance now.

How will OKC and OK banks, insurance companies, and other financial institutions stack up in the growing financial crisis? Will oil & gas revenues help their balance sheets? Will the lack of mortgage troubles in OKC keep their performance above average? Or, have they invested some of their/our money in risky ventures?

Will OKC be an area of stability in the financial industry?

Let's not whistle past the graveyard. Oklahoma has had a log of mortgage defaults in the last couple of years.

Midtowner posted this thought in another thread, but I totally agree. With the O&G industry booming we are looking good. But if that industry tanks watch out. I think we have our share of 30 thousand dollar millionaires here in OK...

There's definitely defaults out there. The house next to mine went into foreclosure and sold for $46,000...which was about $30,000 less than they were originally asking. From what I can tell, I think someone had intended to flip it, but the housing market bottomed out before they could get it sold. However, the good news is that whoever bought it has put a LOT of money into it over the last month or so. Yes, there are foreclosures, but there's also buyers who are taking advantage of the lower prices and are investing back into some of these homes.

Our local banks learned lessons before and weren't willing to risk themselves like some of the others out there. The fact that we didn't really get into the sub-prime market here is what saved us. Yes we had some, yes we still have foreclosures (that happens all the time no matter how good things are). However, by not being stupid with their money, the local banks managed to help stay on course with logic. Which in turn has helped our economy stay up and against the national trend. That's a big benefit to having the big banks be the sole providers. Even the big names in OK aren't the ones that are having problems. Chase and Bank of America are the ones buying up the stupid people right now. Then you've got the bigger local players like MidFirst, BOK, TFCU, etc which stayed on the path of intelligent planning. They're all doing very well.

As for housing, we did experience some drop in pricing here, but not much. I am in the process of buying one right now. We saved about 10K on the total price, but that had to do as much with the number of homes for sale in the area we were looking. There are so many military familes on the east side that in some neighborhoods you'll see 2 or 4 homes for sell on a block because the owners got shipped to Alaksa or Guam or something.

Oklahoma had one of the highest percentages of subprime loans of any state. Nearly a third of all home loans during the last five years were subprime.

That said, we are still looking much better than the harder hit states, where values eclipsed reality, fed by the cheap credit and the financial criminal negligence of this administration.

I work at a bank and from what I have heard, the lenders will start raising their standards as far as who they lend money to. Instead of needing a 650 credit score with 10% down, you will need a 700 credit score with 20%.

The other thing we have to look at is that the housing market in OKC is good with people earning money on their investment as opposed to Cali and other east coast areas.

Where did you hear that soonerguru? Because I heard the exact opposite from any media source I saw/heard.

Yeah, me too:

http://www.okctalk.com/okc-metro-area-talk/11447-oklahoma-home-loans.html?highlight=subprime

Not sure how up to date this is:

Mish's Global Economic Trend Analysis: Dynamic Maps of Nonprime Mortgage Conditions (http://globaleconomicanalysis.blogspot.com/2008/05/dynamic-maps-of-nonprime-mortgage.html?ref=patrick.net)

( this is from May, I don't think it's interactive any longer)

Not sure how up to date this is:

Mish's Global Economic Trend Analysis: Dynamic Maps of Nonprime Mortgage Conditions (http://globaleconomicanalysis.blogspot.com/2008/05/dynamic-maps-of-nonprime-mortgage.html?ref=patrick.net)

( this is from May, I don't think it's interactive any longer)

There is actually a link on there to the interactive site:

Dynamic Maps of Nonprime Mortgage Conditions in the United States (http://www.newyorkfed.org/mortgagemaps/)

Where did you hear that soonerguru? Because I heard the exact opposite from any media source I saw/heard.

New York Times. Now, it was over a year ago, so recent loans may show a big change.

Well I think that's probably an innaccurate statement anyway. OK didn't get into subprime as much as the rest of the country, which is why we are doing well. It's a pretty obvious number crunch.

Most of the subprime loans that are defaulting are in the areas where home values are very high, exotic financing was used to get people into homes that would be half the value of what they bought elsewhere in Oklahoma. When you compare what you can buy a decent house for in this part of the country to areas on the coasts, you can see why more exotic financing was used, albeit probably not very smart. The sheer affordability of the housing market makes the numbers trend down a bit.

You also have national banks that have many, many more loans spread out over the country. When you look at the OKC market (I assume Tulsa is similar) there aren't as many major national banks compared to number strong local/regional banks like a Bank of Oklahoma. Most smaller banks (i.e. not the mega-banks) did not have the assets to loan on large commercial projects which have a great deal of risk like the major banks do. Remember, First National Bank failing is what changed the Oklahoma banking laws to allow out-of-state ownership, so the national banking companies have been slower to move in, sometimes that can be a good thing.