JOAN BARRON Star-Tribune capital bureau | Posted: Sunday, December 16, 2007 12:00 am
CHEYENNE - With only 300 houses in foreclosure and the lowest mortgage loan delinquency rate in the nation, Wyoming is in considerably better shape than states coping with the subprime mortgage scandal.
"For once it's nice to see Wyoming in last place," said Jeffrey C. Vogel, director of the Department of Audit's Banking Division.
Department officials asked the Joint Appropriations Committee Wednesday for four more employees in the banking division.
The reason is a growing state economy and banking industry, not any mortgage loan problems, they said.
During an interview after the committee meeting, Vogel said the reasons for the big mortgage loan problems with banks on the East Coast, California and Colorado were overdevelopment and affordability of houses because of low interest rates.
"With low interest rates, that affected the price of homes and there was rapid appreciation" in their value, he said.
Then the market price in homes fell.
"A lot of the problems that occur in other parts of the country trickle back to Wyoming," Vogel said. "But especially with the subprime issues, I don't see that happening here."
Wyoming, he said, has a good economy. Anyone who wants a job can get one and homes are still affordable, he said.
"So if someone gets financially distressed the home can be put on the market and sold to avoid foreclosure," Vogel said.
The state also does not have a lot of foreclosures that deflate the value of other people's homes, and houses still are appreciating in value, he said.
"So we're sitting pretty good," he added.
In the economic downturn of the 1980s, a number of Wyoming banks folded.
After that crisis passed, the banking industry was stable for many years.
So about six to eight years ago, the department voluntarily cut the number of bank examiners because they weren't needed, Department of Audit Director Mike Geesey told the Joint Appropriations Committee.
Now there are more banks and the staff is at a "critical juncture," Geesey said.
Vogel said the number of state-chartered banks is increasing and three more national banks are looking to convert to a state charter.
The state bank fees are 40 percent lower than those charged by the federal Office of the Comptroller of the Currency in the Department of the Treasury.
In order to be proactive, Vogel is asking for two bank examiners and two people on the non-depository side. These are mortgage brokers or mortgage lenders which are not part of a bank.
He said 1,000 of these are licensed in Wyoming but are not domiciled here. Yet many operate nationwide so their practices spill over into Wyoming, Vogel said.
"Our whole goal is to insure the soundness of each individual bank as well as to insure the financial stability of the banking system," Vogel said.
Geesey, meanwhile, wants to increase starting salaries for accountants with college degrees from $30,000 to $40,000 per year.
Geesey said the human resources section of the Department of Administration and Information promised to look at the department's salary schedule in April, but he needs changes "today" so he can fill vacant positions.
Sen. Phil Nicholas, R-Laramie, a co-chairman of the Joint Appropriations Committee, said the legislators will bring up the salary question when the Department of Administration and Information has its budget hearing.
Capital reporter Joan Barron can be reached at (307) 632-1244 or at joan.barron@trib.com.