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Sheriff Sale, PA: Population 55,163
If all the homes lost to Sheriff Sales in Pennsylvania since 2001 were in one city, it would be Pennsylvania’s 3rd largest city.
March 16, 2005
Philadelphia, PA: Pennsylvania has some of the highest foreclosures rates in the nation. It ranks 9th in the nation for prime loan foreclosures and with subprime loan foreclosures, it ranks even higher at 4th. According to The Reinvestment Fund’s newest study, Mortgage Foreclosure Filings in Pennsylvania, this growing subprime foreclosure rate is fueling the increase in foreclosure filings across the state.
Analyzing mortgage filings between 2000 and 2003, TRF found that 60-75% had been made by subprime lenders. In every county studied, foreclosure filings are outpacing homeownership and housing development rates.
“Perhaps equally troubling is the fact that foreclosures in Pennsylvania are typically concentrated in areas with modest incomes and higher minority populations, disproportionately affecting these communities,” says Ira Goldstein, TRF’s Policy Director. Dr. Goldstein’s group conducted the study for the Pennsylvania Department of Banking, expanding on TRF’s analysis for the Department last summer of the foreclosure epidemic in the Poconos’ Monroe County.
Nationally, rising foreclosures can be explained by a number of factors such as increased consumer access to varied mortgage products, lack of information on alternatives to high cost loans, borrowers with little understanding of interest rates or the importance of paying bills on time, rising healthcare costs and the securitization of the residential mortgage market.
However the study reveals that there are some additional factors that are particular to Pennsylvania. These include ineffective regulations to protect homeowners, the rising costs of owning as well as maintaining homes and abusive lending practices in segments of the mortgage market. These factors too may serve as a bellwether for other states.
“Pennsylvania needs a strategy that encourages a flourishing mortgage market and at the same time, safeguards its communities from the potential adverse impacts of these markets,” explains Jeremy Nowak, President and CEO of TRF.
The report recommends that at a minimum, the State designs and enforces laws and regulations that protect consumers from abusive lending practices. The report also suggests financial education for Pennsylvania’s consumers, to enable them to make informed decisions about debt and personal finances.
The Secretary of Banking has received TRF’s report and is responding with a plan for the State that he is announcing today. “The TRF study has been very helpful in our efforts to develop programs to reduce the high number of foreclosures in the Commonwealth,” said Pennsylvania Secretary of Banking Bill Schenck. “The Banking Report on statewide foreclosures, released today along with the TRF study, includes significant recommendations – some already underway – to make administrative and legislative changes.”
About The Reinvestment Fund
The Reinvestment Fund is a leading innovator in the financing of neighborhood and economic revitalization. Central to its mission is a commitment to put capital and private initiative to work for the public good. With $257 million in capital under its management, TRF is supported by more than 850 investors, including individuals, religious and civic groups, financial institutions, government and private foundations.
In pursuit of its mission, TRF finances housing, community facilities, commercial real estate, business development and sustainable energy projects using loan, equity and other financing tools. It supports its financing with a strong research and policy analysis capacity that has become a highly regarded source of unbiased information for public officials and private investors. For more information, visit the TRF web site at www.trfund.com.
For the full report including extensive statewide and local maps and charts, visit Foreclosures in PA.