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

Table 13
Percentage of Foreclosed Loans Originated
by HUD-Designated Subprime Lenders
Community
All Loans
Originated by
Subprime Lenders Purchase Refinance
Ellicott-Masten 45 10 31
East Side 36 11 25
East Delavan 24 9 15
South Buffalo-River 21 3 17
North Buffalo-Elmwood 15 0 15
West Side-Central 15 6 9
Riverside 14 14 0
North East 11 5 4
Buffalo total 21 7 14
Sources: Erie County Civil Court records; Erie County property database;
U.S. Department of Housing and Urban Development (HUD);
author's calculations.
By comparison, the 1998 Rochester study found that just 8 percent of foreclosures
were associated with subprime lenders. The difference could be attributable to the timing
of the two studies. Because the growth in subprime lending is a recent occurrence, the
impact on foreclosures may have been greater in 2000 than in 1998. However, evidence
suggests that subprime lending is more common in Buffalo than in Rochester, at least
among blacks. One study found that in 2000, almost 75 percent of conventional refinance
loans to blacks in the Buffalo-Niagara metro area were originated by subprime lenders,
compared with only 45 percent in the Rochester metro area. 11
In our study, two Buffalo communities exhibited an exceptionally high share of
foreclosed loans originated by subprime lenders: Ellicott-Masten, 45 percent, and East
Side, 36 percent. Both communities are lower income and have a high concentration of
minorities. Also, in both instances, refinance loans by subprime lenders were by far the
most prevalent. Subprime lending was dominated by refinance loans in most Buffalo
neighborhoods. Riverside, however, proved the exception: all foreclosed loans originated
by subprime lenders were for a purchase. Table 13 indicates that the overall incidence of
subprime foreclosures varied widely among Buffalo’s communities.
11 Bradford, 2002, pp. 38-9.
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