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Using GIS in Foreclosure Analysis: A Look at Forsyth County, NC

Using GIS in Foreclosure Analysis: A Look at Forsyth County, NC. Presented by: Jason Clodfelter, CMS, GISP Carlo Frate, CMS, GISP Forsyth County Tax Administration GIS/Mapping Division. NC Department of Revenue 2011 Advanced Seminar Greensboro, NC September 14, 2011. Discussion Items.

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Using GIS in Foreclosure Analysis: A Look at Forsyth County, NC

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  1. Using GIS in Foreclosure Analysis: A Look at Forsyth County, NC Presented by: Jason Clodfelter, CMS, GISP Carlo Frate, CMS, GISP Forsyth County Tax Administration GIS/Mapping Division NC Department of Revenue 2011 Advanced Seminar Greensboro, NC September 14, 2011

  2. Discussion Items • Foreclosure terminology • Foreclosure process • Tax office analysis • Changes to office procedures

  3. Foreclosure TerminologySource of Mass Confusion Triad sets record for foreclosure filings in 2010 By: Richard Craver, Journal Reporter Published: January 7, 2011 North Carolina and most of the Triad set a record for foreclosure filings in 2010, a state agency reported Thursday. There were 67,854 foreclosures in North Carolina in 2010, an increase of 7 percent over 2009. Forsyth County had a record 2,396 foreclosure filings last year, up 6 percent, according to the N.C. Administrative Office of the Courts… Of the 14 counties in the Triad and Northwest North Carolina, just two — Alleghany and Rockingham — did not set a record in 2010. Although Forsyth has seen a 29 percent increase in foreclosure filings since 2006, some counties in Northwest N.C. have had filings that at least doubled. For example, filings have risen in Watauga County from 107 in 2006 to 356 in 2010, along with going from 75 in 2006 to 160 in 2010 in Ashe County… "North Carolina will have more than a 30 percent increase in completed foreclosures in 2010 compared with 2009," Blomquist said. "I don't believe foreclosures are necessarily going to get a lot worse in 2011, but they're not likely to get much better."

  4. Foreclosure TerminologySource of Mass Confusion • Foreclosure – is a legal process • Multiple steps • Multiple variables • Variety of outcomes • Notice of Hearing on Foreclosure of Deed of Trust • Civil papers filed with Clerk of Court that begin the foreclosure process • Delivered or posted by the Sheriff's department • Often referred to as Foreclosure Filing, Foreclosure Start, Foreclosure Notice or Sheriff’s Notice (terms used by the media)

  5. Foreclosure TerminologySource of Mass Confusion • Notice of Foreclosure • Legal document filed after completion of a foreclosure • Mandated by NC GS 45-38 • Filed with the Register of Deeds • Sometimes referred to as a Completed Foreclosure

  6. Foreclosure Process Banks/Credit Unions Savings & Loans Mortgage Companies Government Entities Home Owners Associations Owner Financing File Notice of Hearing on Foreclosure of Deed of Trust Deed In Lieu Of Foreclosure Foreclosure Related Activities Past Due Payments Are Paid Up Distressed Sale Short Sale Bankruptcy Foreclosure Occurs

  7. OK, So Why Do We Care?Reality • The Tax office is being asked, “What are you doing about all of these foreclosures?” • In order to be able to answer this, we must: • Know where the foreclosures are • Be able to track those properties • Follow subsequent sales of those properties • Determine what, if any, affect the foreclosures have on the market area (neighborhoods) • IAAO Standard on Verification and Adjustment of Sales: • Sales in which a financial institution is the seller typically should be considered as potentially valid for model calibration and ratio studies if they comprise more than 20% of sales in a specific market area.

  8. OK, So Why Do We Care?Reality • Housing department - participation in the Neighborhood Stabilization Program (NSP) • Federal grant money used to help purchase and rehab foreclosed properties • NSP requires that the grant money be focused on census tracts most affected by foreclosures • Can use foreclosure data to target population segments to educate about home ownership and the services offered by Housing • Others • Public Safety/Crime Prevention • Code Enforcement

  9. Source: NC Administrative Office of the Courts, Forsyth County Housing Department, Forsyth County Register of Deeds, Forsyth County Tax Administration

  10. Select Neighborhoods SummarySouthwestern Forsyth County All sales and foreclosure numbers are for 2007 - 2010

  11. 1988 1996 1971 Median Year Built

  12. Select Neighborhoods SummarySoutheastern Forsyth County All sales and foreclosure numbers are for 2007 - 2010

  13. 1973 2002 2007 Median Year Built

  14. Select Neighborhoods SummaryEastern Forsyth County All sales and foreclosure numbers are for 2007 - 2010

  15. 2002 2006 2006 Median Year Built

  16. Summary • General trends in Forsyth County, 2007-2010 • Analysis so far has shown: • Foreclosure-related sales have sharply increased. • Qualified sales have sharply decreased. • Few countywide trends • Other variables influence changes in home prices • General economic conditions • Existing housing stock / Supply & Demand • Neighborhood conditions determine extent of effects on home prices by foreclosures • Age of homes • Location • Price point • Future considerations: • Expand study period into past and future • Examine subsequent sales of foreclosed properties. • Consider neighborhood-by-neighborhood analysis to determine effect of foreclosures on property values • Identify variables to control for (effect of foreclosures vs. effect of economic downturn) • Change workflow processes for classifying and tracking foreclosure-related sales

  17. Changes to Office Procedures Additional Steps to Capture & Track Foreclosures and Foreclosure Related Sales

  18. Changes to Office Procedures • Receive list of Notices of Foreclosure on Deed of Trust (by address) served by Sheriff’s department – add a note to the record receiving notice • Receive list of Notices of Foreclosure, as identified by the Housing Department, on a monthly basis • Match that info up with data in our Tax system to identify records foreclosed on • Code those records to identify them as “Foreclosures”

  19. Changes to Office Procedures • Identify the records with subsequent sales (from financial institutions) after foreclosure and code them as such • These new notes and codes allow us to better track, query and run ratios on sales relating to foreclosures

  20. Effect of Foreclosure Related Sales For Calendar Years 2009, 2010 and 2011 (through August 26)

  21. Contact Information • Jason Clodfelter 336-703-2376 • Email: clodfekj@forsyth.cc • Carlo Frate 336-703-2370 • Email: fratedc@forsyth.cc Forsyth County Tax Administration 201 N Chestnut St Winston-Salem, NC 27101

  22. Addendum Forsyth County Housing Department Using GIS to Identify Home Foreclosures A Positive Side-Effect of Foreclosures

  23. A Positive Side-Effect of ForeclosureNeighborhood Stabilization Program (NSP) • The NSP is intended to reduce blight, rehabilitate abandoned and foreclosed properties, provide affordable housing for buyers and renters and stimulate the local real estate market. • Funds are allocated by a formula based on the number of foreclosures and vacancies in the 20% of US neighborhoods (Census Tracts) with the highest rates of homes financed by a subprime mortgage, are delinquent or are in foreclosure. • These funds are highly targeted to communities with the most severe neighborhood problems associated with the foreclosure crisis. Source: US Department of Housing & Urban Development, Community Planning & Development Office

  24. A Positive Side-Effect of ForeclosureNeighborhood Stabilization Program (NSP) • NSP funds may be used for activities such as: • Establishing financing mechanisms for purchase and redevelopment of foreclosed homes and residential properties • Purchasing and rehabilitating homes and residential properties abandoned or foreclosed • Establishing land banks for foreclosed homes • Demolish blighted structures • Redevelop demolished or vacant properties Source: US Department of Housing & Urban Development, Community Planning & Development Office

  25. A Positive Side-Effect of ForeclosureNeighborhood Stabilization Program (NSP) • Requirements of program • 30% of funds must be used to assist families at or below 80% of Median Household Income • Recipients getting assistance for rental units must be at or below 50% of Median Household Income • Other first-time home buyers can be at 120% of Median Household Income and still receive assistance

  26. A Positive Side-Effect of ForeclosureNeighborhood Stabilization Program (NSP) • Administered locally by the Forsyth County Housing Department • Creating database of foreclosed properties using Notices of Foreclosure • Doing simple geo-coding using addresses and street centerlines to locate foreclosures • Collaboration with the Tax office in terms of data sharing

  27. A Positive Side-Effect of ForeclosureNeighborhood Stabilization Program (NSP) • Assistance Provided to Date • Received $3.625 million through the NSP1 program • Distributed $3,436,343.44 in the form of down payment assistance, rehab assistance and the purchase of foreclosed properties in Forsyth County • This includes assistance to 44 first-time home buyers • Approximately 160 new affordable housing units have been made available

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