190,452 New Listings - March 2010 - Last update March 20, 2010 6:15 AM ESTForeclosure in Cuyahoga County
REO Properties in Cuyahoga County are marching ahead. Of all the foreclosure related lawsuits, 84% came from the high costing sub-prime loans that were filed in this county between 2005 and 2006.
These are the findings of a survey undertaken by the Center on Urban Poverty and Community Development of Case Western Reserve University. The study also showed that Blacks had a larger share of the sub-prime loans than the Whites. The ones made to Blacks were at a higher risk of slipping into foreclosure than those in the hands of the Whites. The surveyors used data from county records as per Home Mortgage Disclosure Act to study the status of residential properties during 2005 and 2006. Two thirds of all the mortgage loans were made during that period.
The origination of the loan was the determining factor of its fate – with sub-prime loans more likely to be foreclosed. The second important point was the race of the borrower, said the head of the research team, Claudia Coulton.
The team also found other interesting points to note. Of all the sub-prime loans contracted in Cuyahoga County in 2005, nearly 33% were foreclosed upon. It compares strongly with 4% in the traditional low interest prime loans.
Higher income Blacks were saddled with the same percentage of sub-prime loans as the lower income Blacks.
In Cuyahoga County 25% of the loans that were contracted by Blacks in 2005, ended up in foreclosure. It can be compared with 13% of the Latinos and 8% of the Whites. There was discrimination in prime loans also with the Blacks having to accept a slightly higher rate than the Whites.
Studying the position of the lenders it was noted that in 2005, 19% of the loans that ended up in foreclosures emanated from banks that did not have a branch in this county. 2.5% of the loans contracted by local banks came to be foreclosed.
In this county during 2005 82% of all the foreclosure postings came from 20 lenders of sub-prime loans. Thus it is seen that sub-prime lenders predated upon Black borrowers in Black localities creating ugly divisions.
Coulton commented that the society has been working on the unfair and unjust denial of loans to the weaker sections. But the society has not geared itself to monitor the harmful loans doled out and its consequences on the weaker section that are finding it difficult to meet mortgage repayments.
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