Wednesday, November 14, 2007

Foreclosure(less) again

Long ago I wondered if there would be enough to comment on.. never seems to be a problem and now readers are sending me tips. So thanks to John for pointing out that USA today has put up a table compiled by RealtyTrac of foreclosures, foreclosure rates and the recent trends in foreclosures for the 100 largest metro areas. See the list here.

One factoid is this comparison of current foreclosure metrics:
Pittsburgh 1 foreclosure in 432 households
Cleveland 1 foreclosure in 57 households

And the trend? Change in foreclosures rate over the most recent year in Pittsburgh: minus 28%.

So yes. Lots of reasons that explain the relatively low rate here. But that is such an extreme difference between two relatively similar regions that you have to wonder. A commenter suggested it comes from different regulatory regimes which I would agree has to be a big part of this.

Update: CNN has a story on Cleveland: Foreclosure's Ground Zero.

4 Comments:

Blogger Jonathan Potts said...

Could you offer a concise explanation of those differences for those of us who remain woefully uninformed on this issue?

Thursday, November 15, 2007 8:39:00 AM  
Anonymous Anonymous said...

In most states, sub-prime loans are made primarily by financial institutions outside of federal control. Ohio never put regulations on these lenders until 2007, and barred local municipalities from doing so in 2002.

Most of the problems that regulators tend to address are full disclosure of fees and rates, proper verification of application information, and avoiding excessive debt to income ratios - loans that a borrower can never reasonably pay given their income.

Thursday, November 15, 2007 11:20:00 AM  
Anonymous Anonymous said...

Some background on the history of regulatory issues in Ohio can be found at www.freetimes.com/stories/15/13/in-plain-sight

In the CNN article you can come away with the impression that the cause of the problem is that poor people overextended themselves with 5 cell phones and then can't pay their mortgage. And not that someone made, and another accepted, a loan that required the borrower to pay 80% of their total household income for their monthly payment - something outside of all sound lending practices.

Friday, November 16, 2007 1:56:00 PM  
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