Study of Repo Homes for Sale Patterns in NY

A newly released study of repo homes for sale patterns in Western New York showed that the region’s foreclosure problem is worse compared with New York City.

According to The Western New York Law Center’s study, one out of four repo homes for sale in Erie County from 2007 to 2008 involved subprime loans, while one out of five involved adjustable rate mortgages.

The study reported that high-cost subprime mortgages and foreclosures are still major problems in the Buffalo area. However, Buffalo never experienced the drastic rise in home prices similar to that in Arizona, California, Florida and Nevada.

The study claimed that the chronic foreclosure problem of Western New York has been going on since 2004, and it was worse than in New York City. However, the extent of the problem was underreported, according to the study.

Law Center’s senior litigation attorney Kathleen Lynch pointed out that high-cost mortgage and subprime loans are causing foreclosures in Erie County. The study reported that majority of repo homes for sale in the county from 2007 to 2008 were taken on fixed-rate loans. And almost 60 percent of loans have rates of about 7.5 percent.

The study also said that all communities and municipalities in the county have high-cost mortgage loans that became delinquent and eventually led to foreclosures. Meanwhile, 55 percent of adjustable-rate mortgages started at rates of 7.5 and 9.5 percent. However, about 20 percent of the total loans started on 12.5 percent rate.

Additionally, over 40 percent of maximum rates peaked at 15 and 17.5 percent, with 9 percent of loans having higher rates.

Lynch called for uniform and consistent reporting requirements for foreclosures and mortgage loan originations across the country. She urged for an early collection of reporting requirements, adding that if it was done earlier, the trends would have been detected immediately and a national crisis would have been prevented.

From 2004 to 2007, Erie County’s average foreclosure rate was 248 percent while Buffalo posted 40 percent or 1,110 foreclosure filings in 2007 and 894 or 39 percent in 2008.

The study was conducted to address the lack of comprehensive and accurate information about repo homes for sale in Erie County.

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