Residential Foreclosures in the City of Buffalo, 1990-2000 - Federal ...

the same time, there is evidence that FHA loans performed slightly worse in Buffalo than
they did in Rochester in the 1990s. 7
Table 10
Percentage Distribution by Type of Foreclosed Loan: FHA and Conventional
Community FHA Conventional
East Delavan 48 52
South Buffalo-River 45 48
West Side-Central 39 61
North Buffalo-Elmwood 38 54
East Side 36 61
Riverside 34 62
North East 33 63
Ellicott-Masten 14 83
Buffalo total 38 59
Sources: Erie County Civil Court records; Erie County
property database; author's calculations.
Note: Totals do not sum to 100 percent because VA loans are not shown.
For the most part, the percentage of FHA and conventional foreclosures did not
vary substantially among Buffalo’s communities, although there were some exceptions.
The cases in which the patterns of FHA and conventional foreclosures were atypical can
be explained in part by the patterns observed in the previous two analyses. However,
differences appear to have more to do with variations in loan performance than with
variations in lending patterns. For instance, Ellicott-Masten had an exceptionally small
proportion of foreclosures on FHA loans—just 14 percent—and a correspondingly high
83 percent share of foreclosures on conventional loans. However, the community shows a
distribution of FHA and conventional lending similar to Buffalo as a whole (Table 10).
Thus, Ellicott-Masten’s pattern of foreclosures by loan type is better explained by the fact
that FHA loans in this neighborhood performed much better than conventional loans
(Chart 7). Loan performance also accounts largely for the relatively high share of FHA
foreclosures found in East Delavan, 48 percent. While the community did see a
somewhat higher volume of FHA lending in the 1990s than the city did generally, the
7 See Klump, Douglas, and Rose, 2002, in which an analysis of FHA loans originated from 1996 to 2000
found the default rate to be slightly higher in Buffalo than in Rochester.
40