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Overcoming roadblocks to recovery: local strategies
Tom Feltner | Vice President, Policy and Communications
Woodstock Institute | 29 E Madison Suite 1710 | Chicago, Illinois
[email protected] | www.woodstockinst.org
@tfeltner | @woodstockinst | #justeconomy
Regional Quarterly Trends in Foreclosure Filings, 2005 to 2011
4,000
8,000
12,000
16,000
20,000
24,000
28,000
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
1,000
3,000
5,000
7,000
9,000
11,000
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
New Foreclosure Filings
Completed Foreclosure Auctions
Regional Foreclosure Filings
2006
2007
2008
2009
Regional Foreclosure Filings
2006
2007
2008
2009
Regional Foreclosure Filings
2006
2007
2008
2009
Regional Foreclosure Filings
2006
2007
2008
2009
Accumulation of Foreclosure Activity in Communities of Color, 2006 to 2010
8.7% 9.7%
7.0%
27.0%
24.4% 23.2%
19.0%
15.1%
10.9%
26.3%
15.9%
12.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
80% or greater African American
50% or greater mixed Minority
50% or greater Latino 20-49.9% minority 10-19.9% minority Less than 10% minority
Share of Properties Share of Properties with Foreclosure Filings
Effect of foreclosure accumulation in Englewood and West Englewood, 2007
Effect of foreclosure accumulation in Englewood and West Englewood, 2008
Effect of foreclosure accumulation in Englewood and West Englewood, 2009
Effect of foreclosure accumulation in Englewood and West Englewood, 2010
Chicago region foreclosure process times increasing, at record highs since 2008
Strategy #1 – Foreclosure prevention
for homeowners staying in their homes
Local strategies need to address unemployment-driven foreclosures,
underwater homeowners
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011
Figure. Foreclosure Filings for Single-family Units in the Six County Chicago Region, by Type of Mortgage, 2008-2011
Other
Balloon
ARM
FHA/VA
Conventional
Local strategies need to address unemployment-driven foreclosures,
underwater homeowners
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2008 2009 2010 2011
Figure. Single-family Mortgages Entering Foreclosure in the Six County Chicago Region, by Period of Origination, 2008-2011
2010
2009
2008
2005-2007
Before 2005
Local strategies need to address unemployment-driven foreclosures,
underwater homeowners
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
10 Percent or less Minority
10-19.9 Percent Minority
20-49.9 Percent Minority
50-79.9 Percent Minority
80 Percent or more African
American
50 Percent or more Latino
Loan-to-value ratios of properties with mortgages in Chicago six county region, fourth quarter of 2011
LTV < 75
LTV 75-94
LTV 95-99
LTV 100-109
LTV 110-124
LTV > 125
Source:
Proprietary data
on negative
equity; 2010
Decennial
Census
Local strategies need to address unemployment-driven foreclosures,
underwater homeowners
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
10 Percent or less Minority
10-19.9 Percent Minority
20-49.9 Percent Minority
50-79.9 Percent Minority
80 Percent or more African
American
50 Percent or more Latino
Figure. Average home equity and outstanding mortgage debt per property in the Chicago six county region, fourth quarter 2011
Mortgage
Equity
Local strategies need to address unemployment-driven foreclosures,
underwater homeowners
Strategy #2 – Reducing the impact of
vacant properties
Concentration of Unsold Properties in Communities of Color
Disparate Impact of Lender-Owned Properties
Unsold REO Properties
64 percent are concentrated in highly African American communities
Absorption Rate
It will take 25 percent longer for REO properties in highly African American communities to be absorbed into the market.
Value Declines
Highly African American communities saw declines of 35 percent, while primarily white communities saw declines of 17 percent.
Communities of Color Hardest Hit by Vacant Properties
Vacant Properties Associated with Foreclosure
Vacant Properties
18,320 properties identified as vacant or potentially vacant by the City of Chicago
Nearly 70 percent of all vacant properties on the Chicago Vacant Buildings Index are associated with a foreclosure
Red Flag Properties
1,896 properties on the Index are “red flag” properties, many of which may be lender walkaways
71 percent of red flag properties are located in highly African American communities, compared to only 7 percent in predominantly white communities
Impact
Shifts approximately $36 million in maintenance costs to City of Chicago
Reducing the impact of vacant properties: City of Chicago vacant property ordinance
Ordinance Requirements
Mortgagees of vacant buildings to register
within the later of 30 days of becoming
vacant or 60 days after a default.
Mortgagees must appoint an agent located
in Cook County to handle communications
concerning the ordinance.
Mortgagees must maintain and secure
vacant buildings to the standards set by the
City. If not, the mortgagee will be fined
between $500 and $1,000 for each day the
building is in violation of the ordinance.
Status
In effect since November 2011
Supported by majority servicers
Subject to outstanding lawsuit by FHFA
Overcoming roadblocks to recovery: local strategies
Tom Feltner | Vice President, Policy and Communications
Woodstock Institute | 29 E Madison Suite 1710 | Chicago, Illinois
[email protected] | www.woodstockinst.org
@tfeltner | #justeconomy
![CHAPTER 15 Foreclosure and Other Remedies · § 15.08 Transfer Taxes on Foreclosure and Substitute Transactions [1] Foreclosure and Alternatives [2] State Tax [a] Foreclosure Purchase](https://img.dokumen.tips/doc/110x75/5b5e7bb77f8b9aa3048d2307/chapter-15-foreclosure-and-other-1508-transfer-taxes-on-foreclosure-and.jpg)
