The headlines for the past several weeks have been relentless: Foreclosures are up; housing starts are down; some of the nation's biggest banks are seeking billion-dollar bailouts from foreign investment firms after making bad bets in the mortgage market.

Neither the housing downturn nor the related crisis in subprime mortgages seem to be having a large direct effect on Helena or Montana yet, local experts say.

Montana lenders have made fewer subprime loans than lenders in other states, and Montana's foreclosure rates are below the rates in both the nation and the 11-state block that encompasses most of the Rocky Mountain region, according to data compiled by the Mortgage Bankers Association.

At the end of the third quarter of 2007, just three states had lower rates than Montana of homes either in foreclosure or more than 90 days delinquent. Just 1.17 percent of all mortgages in Montana were either 90 days late or in foreclosure, a figure bested only by Washington (1.12 percent), Oregon (1.05 percent) and Wyoming (1.02 percent).

At the other end of the spectrum, Ohio, Indiana and Michigan are all higher than 5 percent, meaning one in 20 homes in those states is either in foreclosure or three months behind on payments.

"Nationally, it's really taken a toll," said Annie Goodwin, commissioner of the Montana Division of Banking and Financial Institutions. "But Montana is better off than most states when it comes to the foreclosures that have been occurring. We continue to have a strong economy and Montana is a desirable place to live."

In the subprime market, Montana's numbers aren't impressive, but they're a far sight better than those for the Mountain region or the nation as a whole. Subprime loans are typically made to borrowers with less-than-ideal credit, and usually carry higher interest rates to make up for the higher risk taken on by lenders.

Among subprime loans in Montana, 5.54 percent were either in foreclosure or more than three months behind at the end of the third quarter, compared to 8.43 percent in the Rocky Mountain region and 11.38 percent in the U.S.

Perhaps more significantly, there simply aren't as many subprime loans in Montana as there are elsewhere. Just 6 percent of all mortgages serviced in the third quarter in Montana were subprime, compared to 13.8 percent in the Rocky Mountain states and 13.2 percent across the country.

Montana lenders have also shied away from adjustable rate mortgages, or ARMs, which typically have a low introductory rate that resets after a few years to a higher rate, causing the monthly payment to go up as well. ARMs aren't unheard of here, but they make up a smaller percentage of active mortgages than they do elsewhere.

John McLaughlin, vice president and head of the real estate department for Mountain West Bank, said while Montana lenders weren't as active in the subprime market, the national crisis is affecting people's ability to relocate to Montana.

"People are having a little harder time selling their homes in outlying markets to move here," he said.

McLaughlin added that Montanans with good credit shouldn't feel the effects of the crunch.

"Where it's going to affect people is for the people with lower credit scores," he said. "(Lenders have) tightened the reins. People with good credit scores won't have any problems, but people with marginal credit might have some trouble getting into a house."

Steve Turkiewicz of the Montana Bankers Association believes there was less speculation in Montana real estate than there was elsewhere. People in Montana are more likely to buy homes to live in them, as opposed to holding them for a short period of time and flipping them for a profit, he said.

"You have to look at the Montana economy. I just don't think we had that type of market here," he said. "I'm sure we had some of that activity, but I don't think Montana attracted the same level of interest from nontraditional lenders."

Still, Turkiewicz cautioned that the worst may still be yet to come for the mortgage picture in Montana. The state's economy tends to lag the nation in many ways, he said, and a number of adjustable rate mortgages in Montana are scheduled to reset to a higher interest rate later this year or early in 2009.

"I'm hopeful that people are seeing what's happening in the (national) marketplace and are taking the time now, if they've got a reset coming, to talk to their lenders to see what options they have."

Reporter John Harrington: 447-4080 or john.harrington@helenair.com