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

foreclosed in less than four and more than eight years. Overall, the share of foreclosures
on loans more than eight years old tended to be similar among communities, with
Riverside, 17 percent, and South Buffalo-River, 17 percent, demonstrating somewhat
smaller percentages than that of Buffalo as a whole.
We also looked at how the age of foreclosed loans varied by the type of loan
(Chart 10). Conventional loans were much more likely than FHA loans to foreclose
quickly (55 percent versus 26 percent); the same can be said for refinance loans vis-à-vis
purchase loans. These findings suggest that different types of loans have different
underwriting standards, or borrower pools at varying risk levels. In this case, a good part
of the disparity may reflect the influence of subprime lending. As we discussed, higher
risk subprime loans are most often for conventional refinancings.
FHA/VA
Conventional
Purchase
Refinance
Chart 10
Age of Loan at Default by Type of Loan
Percentage Less than Four Years and Percentage More than Eight Years
Percent
0 10 20 30 40 50 60 70 80
Sources: Erie County Civil Court records; Erie County property database; author’s calculations.
54
More than eight
Less than four
Owner Tenure
We now shed light on the contribution of refinance loans to early foreclosure by looking
at how long borrowers owned their property prior to foreclosure. Owner tenure may also
be indicative of the amount of equity homeowners had accrued in their property.
Furthermore, distinguishing between short- and long-tenure owners helps to clarify the
nature of neighborhood transition. Short-tenure homeowners are more likely to be inmovers—
new residents to a neighborhood— while long-tenure homeowners are more
likely to be out-movers— residents leaving a neighborhood.