Foreclosure, Federal Financial Institutions, and the Fortunes of Detroit's Middle- and Working-Class Neighborhoods.

mortgage foreclosure;neighborhood change;Urban Planning;Social Sciences;Urban and Regional Planning

Seymour, EricThomas, June Manning ;

University of Michigan

关键词: mortgage foreclosure;    neighborhood change;    Urban Planning;    Social Sciences;    Urban and Regional Planning;   

Others  :  https://deepblue.lib.umich.edu/bitstream/handle/2027.42/135750/eseymour_1.pdf?sequence=1&isAllowed=y

瑞士|英语

来源: The Illinois Digital Environment for Access to Learning and Scholarship

【 摘 要 】

During the U.S. foreclosure crisis, millions of homes were foreclosed, with many repossessed by the banks and federal agencies owning or insuring the unpaid mortgages. Prior research has found strong associations between foreclosures and negative neighborhood outcomes, including increased crime and diminished home values. These outcomes are attributed to foreclosures being vacant and inadequately maintained, increasing neighborhood blight and leading nearby homeowners to disinvest. Each of these mechanisms is influenced by the practices of the banks and federal agencies that repossessed foreclosed homes, but these institutions and their practices have not yet been the subject of sustained research. This dissertation addresses this gap by examining how the institutions responsible for repossessed mortgage foreclosures, known as real estate owned properties (REOs), manage their inventories in Detroit, which possessed one of the largest concentrations of REOs in the nation for several years. Using real estate transaction records for the Detroit tri-county area from 2005 to 2013, along with policy analysis and interviews, I examine what happened to REOs in Detroit and its suburbs. In this study, I compare what happened with REOs owned by federal agencies with those owned by private entities, as federal agencies possess a dual mandate to both quickly reduce inventory and stabilize neighborhoods. I compare federal agencies and private entities in terms of the share of sales they make to homebuyers and investors of different sizes, the length of time properties remain in REO, and impact current and former REOs have on nearby home values. I found that federal and private entities alike sold large numbers of Detroit homes to investors, many of whom were linked to code violations and tax delinquency. I also found that properties remained in HUD;;s inventory for lengthy periods, increasing the likelihood of deterioration. Further, I found that REOs owned by both federal and private entities were likely to harm home values. My findings indicate potential conflicts between federal agencies;; dual mandates, with pressures to sell properties coming at the expense of neighborhood stabilization objectives. My findings also suggest that HUD;;s rules for conveying properties after foreclosure are linked to extended REO periods.