Inner cities are getting mauled by foreclosures

Posted by: Peter Coy on March 28, 2008

A new study by the Initiative for a Competitive Inner City says that inner cities are being harmed even worse than other parts of the country by the foreclosure crisis. In 2007, 0.63% of residences in inner cities were taken over by banks, vs. 0.31% of residences in the rest of the country.

Here are ICIC’s results for the inner cities with the highest rates of properties entering banks’ “real estate owned” (REO) portfolios:

Detroit 3.7%
Cleveland 3.0%
Atlanta 2.6%
Indianapolis 1.9%
Akron 1.8%
Stockton 1.7%
St. Louis 1.6%
Toledo 1.6%
Sacramento 1.6%
Kansas City 1.6%

Only one California city is on the 2007 list, but ICIC says “based on the number of properties in early stages of foreclosure in the last months of 2007, we expect that in 2008, California inner cities will figure much more prominently in the foreclosure crisis than they did in 2007.”

When homes become vacant they tend to deteriorate and attract crime.
ICIC’s conclusion: “the current crisis could undermine decades of hard-won gains in inner city neighborhoods across the country.”

Reader Comments

douglas

March 31, 2008 2:08 PM

Interestingly, in a county like Los Angeles, the bulk of the foreclosures (trustee sales) are not in the inner city but rather in the almost rural suburbia areas like Palmdale and Lancaster.

Here is the link to a report that point's that out:
http://propertyshark.com/mason/text/news_releases.html

Olivia

April 18, 2008 11:44 AM

We live in Georgia, and we were over four months behind in our mortgage payments. My wife and I called almost every agency in and around the state of Georgia seeking help to save our home. But to no avail. We contracted mortgagebuyerbasics.com on a whim of a chance. They were very sympathetic to our situation. They explained the process to us, then immediately started working with the loan agency to stop the foreclosure proceeding. They also kept us abreast of the loan company’s process and progress. By mortgage buyer basics quick response to our needs we were able to work out a repayment plan and keep our home.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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