Friday, October 19, 2007

implode-o-meter - tracking foreclosures

Just keeping track of the foreclosure crisis. It remains the case that any data I see on the foreclosure crisis nationally shows relatively lower impacts locally, yet at the same time a concentration of defaults just up the pike in Ohio. Something I don't quite take at face value.

In looking for a more pessimistic version I found this report by ACORN put out just a few months ago. Yet even it does not paint the worst picture for Pittsburgh. It says Pittsburgh ranked all of 49th in the rate of foreclosures. 49th out of what I can't quite tell and on the top of page 3 it seems to say our rate is going down locally while we know nationally these numbers are jumping. It's curious in that it sure seems to me that the sentence where it describes the foreclosure rate going down sounds like it was written for data showing the rate going up:
"In Allegheny in April 2007, mortgage companies filed 395 foreclosure filings against homeowners who were behind on their mortgage. 460 notices were filed just a year earlier in April 2006. "

So my math may be off, but that is a year over year decline of 14% which would be noteworthy in itself, but that much more curious given the jumps in that rate across the nation or just within Pennsylvania. That lead me to see if this was really written for other regions and indeed ACORN has reports from around the country released the same time as the report on Pittsburgh. I looked at Cleveland's report and it just does not compare to Pittsburgh's. In Cleveland it said their rate of foreclosures in 2006 was one per 40 households while Pittsburgh's rate was less than half that 1 in 88 households for the same year. (update: here is a new blog focused just on Cleveland's foreclosure crisis: Foreclosing Cleveland).

My guess for some of the incongruous local stats: more older homeowners who have paid off their mortgages. They may be in similar financial straits, but they would not be captured by the bank foreclosure data everyone focuses on. They may be unable to keep up with taxes for sure which would be captured by tax lien or related data. Just suggesting hypotheses.

But high or low here, it's still something that is affecting a large part of the economy. So here is a remarkably informative web site keeping track of the problems in the nations lending markets: Implode-o-meter written about in the WSJ a couple months ago.


Anonymous Anonymous said...

I know that you refuse to believe it, but the crisis just doesn't seem to have hit as hard here. In addition to the older homeowner example you describe, there are other factors that would seem to explain it. One, a huge percentage of the defaults in coastal markets is speculative. Something like 1 in 2 foreclosures in places like South Florida and San Diego are not owner-occupied properties. Two, there was no bubble in housing prices here. That would suggest that most borrowers did not need to take on the types of loans--AMRs, interest-only, etc--that are causing the most pain elsewhere. Three, compared with the upper midwest like Cleveland, Toledo and Michigan, our economy has been relatively stable. Over the last 5 years there has been a complete restructuring of the auto industry, especially in the tier two and three suppliers, that has had disruptive effect. We are virtually uneffected by that economic restructuring. Heck, you're the one who is always saying that we're unique and can't be compared to other regiohs, right?

Friday, October 19, 2007 1:35:00 PM  
Blogger EdHeath said...

It strikes me, without any evidence, that we had a foreclosure crisis a couple of years ago. Maybe we culled the weak members of the herd then.

Friday, October 19, 2007 10:27:00 PM  
Blogger C. Briem said...

ok ok.. I believe the numbers in themselves, but interpreting them is what I wonder about. It's just the scale of difference between here and our often comparable rust belt cousin that seems odd to me. Yup we're unique, but that unique from Cleveland that they are near the worst hit and we are closer to the least? All of NE Ohio has this impact, why does it nominally appear to be impacted by the PA/OH border?

I also don't have data to say much on Ed's hypothesis, but I'd throw that into the mix when looking for an answer.

Saturday, October 20, 2007 9:27:00 AM  
Anonymous Anonymous said...

One difference is that Ohio had a much weaker regulatory climate that made predatory lending practices much more common.

Monday, October 22, 2007 8:32:00 AM  

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