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

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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.
Citywide, the average tenure of homeowners whose loans foreclosed in 2000 was 8.6 years. This finding is similar to that of the Rochester study, where the average tenure was 8.3 years. We divide foreclosures in 2000 into three categories based on owner tenure: short tenure (less than five years), mid tenure (five to ten years), and long tenure (more than ten years). About a third of all foreclosed borrowers in Buffalo fell under each category, suggesting that the circumstances behind these foreclosures varied widely. Buffalo East Side Riverside North East North Buffalo- Elmwood West Side-Central Ellicott-Masten East Delavan South Buffalo- River Chart 11 Owner Tenure of Foreclosures by Community: 2000 Foreclosed Borrowers Who Owned Their Property for Less than Five and More than Ten Years Percent 0 10 20 30 40 50 60 Sources: Erie County Civil Court records; Erie County property database; author’s calculations. 55 Less than five More than ten Owner tenure varied among Buffalo’s communities as well. Chart 11 shows the percentage of foreclosed borrowers in each community who owned their homes for less than five and more than ten years. Two communities stand out for their wide differences in the percentage of foreclosed borrowers in each category. Half of the foreclosed borrowers in East Side had owned their home for less than five years, while only 14 percent had owned their home for more than ten years. East Side’s high share of shorttenure owners along with the community’s high share of foreclosures on young loans suggest the prevalence of foreclosures on high-risk purchase loans. In fact, about onefourth of East Side’s foreclosures in 2000 were purchase loans that defaulted in less than four years. South Buffalo-River, conversely, had significantly more long-tenure than
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Residential Foreclosures in the Cit
Page 3 and 4:
Table of Contents Acknowledgements
Page 5 and 6: Executive Summary The U.S. resident
Page 7 and 8: Housing Condition In general, the c
Page 9 and 10: Additional Liens At the time of def
Page 11 and 12: Chapter 1: Introduction In 2000, th
Page 13 and 14: • a brief evaluation of the econo
Page 15 and 16: Limitations of the Study The method
Page 17 and 18: Chart 2 Unemployment Rate: Buffalo-
Page 19 and 20: Chart 3 Residential Foreclosures in
Page 21 and 22: Map 2 Map 3 Foreclosures by Neighbo
Page 23 and 24: low rate of foreclosure in the pred
Page 25 and 26: tracts. Foreclosures were clearly b
Page 27 and 28: By separating out transitioning cen
Page 29 and 30: The relationship between income and
Page 31 and 32: Map 8 Residential Vacancies: City o
Page 33 and 34: Property values have been declining
Page 35 and 36: Chapter 5: Mortgage Lending Trends
Page 37 and 38: Chart 6 plots the trends in FHA and
Page 39 and 40: While the level of lending over the
Page 41 and 42: well in this low-income community.
Page 43 and 44: performance of those loans was extr
Page 45 and 46: are becoming more rare, they are li
Page 47 and 48: Table 12 Percentage of Foreclosed L
Page 49 and 50: Table 13 Percentage of Foreclosed L
Page 51 and 52: As Table 14 shows, high-cost and ve
Page 53 and 54: 1990 to 2000. Finally, we also foun
Page 55: Table 15 Age of Loan at Default: Fo
Page 59 and 60: to arrange solutions to their finan
Page 61 and 62: Moreover, the unpaid balance on mor
Page 63 and 64: inordinately high loan amounts, and
Page 65 and 66: But the discrepancy between judgmen
Page 67 and 68: those with the highest rate of mino
Page 69 and 70: conventional loans were for a home
Page 71 and 72: the benefits of homeownership exten
Page 73 and 74: accuracy of comparisons among commu
Page 75 and 76: 73 Appendix B: Continued Foreclosur
Page 77: Johnson, Jennifer E. H., Diane Levy
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