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Explore the multifaceted dimensions of foreclosures within neighborhood housing markets, addressing trends, race disparities, and tailored solutions at a local level. Utilize data to decipher industry shifts and understand foreclosure patterns.
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Exploring the Dimensions of Foreclosure in the Context of Neighborhood HousingMarkets. Michael Barndt Todd Clausen Jeff Arp Nonprofit Center of Milwaukee mbarndt@nonprofitcentermilwaukee.org
Not all mortgages are alike • Not all neighborhoods are alike • Time trends and relative trends matter • Neighborhood context matters • Race still matters • Solutions need to match the local circumstance • Solutions need to address the variation in the problem • Solutions need to include a neighborhood scale component Parsing Context
Purchase • Mortgage • Adjustment in loan – ARMs • Refinanced Mortgage • Sale to capture appreciation • Home Equity Loan • Financial changes for mortgage holder • Transfer of Paper • Payment experience • Les Pendens • “Short sale” • Foreclosure – “Sheriff’s Sale” • Disposition of Foreclosure “Foreclosure” is not just an event
Purchase – SALES/ OWNER// LAND CONTRACT ?? • Mortgage – REGISTRATION OF DEED// HMDA • // CREDIT SCORE ?? • Adjustment in loan – ARMs - ?? • Refinanced Mortgage – REGISTRATION// HMDA • Sale to capture appreciation • Home Equity Loan - ?? • Financial changes for mortgage holder – COUNSELING AGENCIES • Transfer of Paper - ?? • Payment experience – LOAN PERFORMANCE – FED. RESERVE • Les Pendens - COURT • “Short sale” – LINK SALES/ ASSESSED VALUE • Foreclosure – “Sheriff’s Sale” – FORECLOSURE LIST • Disposition of Foreclosure – OWNER/ CODE VIOLATIONS Data is scattered and often unavailable
Use HMDA loan data. We had doubts about whether the HMDA file had enough info. • Create amortization schedules. • payment amount, interest paid, principle paid. • Compare loan costs for actual interest rates to costs for the same loans if they had a prime rate. Our Data Strategy
Shift to high cost loans was substantially “Extractive” • After normalizing by the number of loans originated we mapped total extra dollars per loan. Neighborhood Effects
2006 Applications: 24,998 Originations: 10,921 43.7% High Cost: 4,979 45.6% Average Loan Amount: $123,400 High Cost White: 26.5% High Cost Black: 72.1% High Cost Hispanic: 55.7% Distribution of High Cost Loans
Green outline surrounds blocks within the city of Milwaukee which are greater than 75% African American Sheriffs Sales 1992 to 2007 Foreclosure Hot Spots 1992- 2007
Red outline surrounds blocks within the city of Milwaukee which are greater than 75% African American Foreclosure Rate 1992 to 2007 Foreclosure Rates For single/duplex parcels 1992- 2007
Westside Academy Attendance District Foreclosure Rates For single/duplex parcels 1992- 2007
Parcel View Foreclosure Events by parcel 1992- 2007
Underlying Point Data Foreclosure Hot Spots 1992- 2007
Foreclosure Rate 1992 to 2007 Foreclosure Rates For single/duplex parcels 1992- 2007
A high mobility neighborhood on the western edge of the district with a mix of owner-occupied and investor owned properties. Tenure 2007
Tenure Change1995 to 2007 Ownership Change For single/duplex parcels 1995- 2007
Points indicate the locations of Sheriffs Sale Foreclosures 1992 to 2007 Tenure Change1995 to 2007
Neighborhood level trends and impacts • Foreclosure trends and distribution • Results of foreclosure sales – short and long term owner patterns • Investor owner patterns – effects on rental market • Changing patterns in length of owner occupancy Other dimensions of our research
FactorsOwner occupant/ Investor/ Speculator/ AbsentTime frame for Adjustable Rate MortgagesRelationship of Market to Mortgage ValueHousehold Financial Changes Health/ Employment Investor RoleIndustry business model Conservative/ Speculative/ Extractive/ Absent
Not all mortgages are alike • Not all neighborhoods are alike • Time trends and relative trends matter • Race still matters • Neighborhood context matters • Solutions need to match the local circumstance • Solutions need to address the variation in the problem • Solutions need to include a neighborhood scale component Parsing Context
Michael Barndt • Nonprofit Center of Milwaukee • mbarndt@nonprofitcentermilwaukee.org • National Neighborhood Indicators Partnership • Urban.org/NNIP • Center for Housing Policy • Foreclosure-Response.Org