Connecticut Foreclosed Properties Hit High- and Low-Income Families

Studies by First American CoreLogic and The New York Times showed indications that the number of foreclosed properties in Connecticut is rising much more than expected and that both low-income and rich families have been downed by foreclosures.

In March, nearly 5 percent of mortgage loans taken out by homeowners in Connecticut were at least three months past due.

Based on data from First American CoreLogic, a firm that tracks foreclosed properties across the country, Connecticut is 13th in a ranking of delinquency rates among U.S. states.

Over 27,000 houses in Hartford, New Haven, Fairfield and Litchfield were hit with foreclosure filings during the period from January 2005 to August 2008. Further investigations by The Times of former owners of forclosed properties in the counties showed that neighborhoods with the biggest number of minorities have the highest number of foreclosed properties.

The Times also found that the neighborhoods with the biggest number of forclosed properties had the biggest number of borrowers of subprime loans. The four counties, populated mostly by blacks and Hispanics, triple the pace of foreclosures in counties populated mostly by whites.

In The Times study, the cities of New Haven, Bridgeport, Hartford and Waterbury comprised 25 percent of foreclosure filings and forclosed properties in the four hardest hit counties. Among the four cities, the hardest hit was Bridgeport, where over 7 percent of houses have been foreclosed since 2005.

Wealthier neighborhoods, populated mostly by whites, have not been resistant to the crisis of forclosed properties. Delinquency rates in Canaan, New Milford and Torrington have increased by over 50 percent in the past 12 months.

Attorney General Richard Blumenthal related that there are thousands of homeowners from the wealthier neighborhoods that do not like to admit or show their neighbors that they are in financial trouble. They hold the belief that they should not be having money problems.

Many of the wealthier homeowners hire lawyers to prevent their houses from becoming forclosed properties. Greenwich lawyer Eileen Pate said she is representing a family who used their home in financing their two children’s education in Ivy League schools.

A Stamford lawyer said he is representing investment bankers, corporate executives and developers who are trying to sell their homes in the $2.5 million price range. These homes are located in Greenwich, New Canaan and Darien.

Joan Carty, CEO and president of Housing Development Fund, explained that Connecticut homeowners are having a harder time in preventing their houses from becoming foreclosed properties than those in other states because most borrowers took private loans not guaranteed by Freddie Mac or Fannie Mae so they could take out larger loans.

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