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

Additional Liens
At the time of default, a substantial share of Buffalo homeowners were experiencing
additional financial stress. Half of all properties foreclosed in 2000 had at least one
additional lien. Slightly more than 20 percent of foreclosed properties had more than one
mortgage, while another 8 percent had other types of liens held by financial institutions.
Just 5 percent of additional liens were attributable to medical expenses.
Foreclosure Judgment Amount
The average judgment amount for Buffalo foreclosures in 2000 was $48,744. For the city
as a whole, the median judgment amount was 107 percent of the original loan amount,
with all communities showing comparable ratios. The ratio is even higher when
judgments are compared with current assessed values. The judgment amount was 119
percent of current assessed value, suggesting that the typical Buffalo homeowner owed
about 20 percent more on his or her mortgage loan than the current value of the home.
Remarkably, the median “judgment-to-value” ratio for foreclosures in 2000 exceeded 100
percent in every Buffalo community. These ratios tended to be higher in lower income
communities; Ellicott-Masten and East Side, for example, showed ratios in excess of 150
percent.
Conclusions and Implications
The growth in foreclosures in Buffalo is widespread and the factors behind it are
complex. Moreover, the incidence of foreclosure is up significantly in all communities.
A central finding of our study is that foreclosures were most concentrated in
Buffalo’s higher income minority neighborhoods. Yet these neighborhoods still possess
lower incomes compared with the Buffalo-Niagara metro area in general. This
phenomenon appears to be tied to patterns of urban change. For decades, the minority
population in Buffalo has been migrating outward from the inner city, generally to newer,
better conditioned housing in adjacent neighborhoods. The neighborhoods at the peak of
this transition— those with the highest rate of minority change— had the highest rate of
foreclosure. Today, urban change has progressed to the extent that such neighborhoods
tend to be located along Buffalo’s borders. The high rate of foreclosures in these outer
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