DS News

» VISIT US ONLINE @ DSNEWS.COM 77 hearing—she quickly moved on to ask the secretary about the expected default rate of people who gained homeownership as a result of lowering FHA insurance premiums. "We have a default rate of less than 10 percent," Castro said. "It's improved over the last couple of years. We also have seen serious delinquencies, which refer to 90-day delinquencies, drop by 27 percent since 2013, because 2013 and 2014 have been some of the strongest on the books." In response to Love's question about what happens when the loans go into default, Castro said, "at's a great question. ere's a long process before that happens. In fact, I think to the credit of FHA, and in part to the committee, we have improved our loss mitiga- tion process. We work with folks through housing counseling and through other mea- sures to try and avoid default." Love then turned her questioning toward what happens to the value of homes in the ar- eas where homes default and what happens to the people who have "gotten into their homes responsibly" when someone around them defaults. After Castro said he disagreed with the premise of the question, Love repeated her question as to the effect of defaults on sur- rounding home values. "I think the answer to that is that it var- ies," Castro said. "Sometimes those homes are sold, and somebody new moves in, so you have a variety of experiences out there in terms of what happens in that circumstance." Love pointed out those effects by drawing from an economic review by the Federal Re- serve Bank of Atlanta: "Given that foreclosure properties generally sell at a discount, the natural question arises as to whether these distressed properties in turn put downward sale prices pressure on neighborhood proper- ties resulting in negative externalities." She also quoted former HUD Secretary Shaun Donovan, Castro's predecessor: "Fore- closed and vacant homes have a debilitating effect on neighborhoods and often lead to blighted neighborhoods, decay, and reduced property values." Love discussed the impor- tance of looking beyond what is "seen" and stating that the issue goes beyond just simply getting people into homes. "What I'm trying to say is, this is not just a fiscal issue for me," said Love, a former mayor in Utah who began her first Congres- sional term in January. "is is a moral issue. . . What do you say to the people who have gotten into homes responsibly, and all of a sudden, because of so many different foreclo- sures around that area, realize their neighbor- hoods are going into decay and they've lost the value in their home? What do you say to those people?" Castro responded with a plug for FHA. "I'd say first of all, if they're in that neigh- borhood, chances are that those responsible homebuyers were through FHA, because we've been doing our work," Castro said. Love wasn't convinced that the secretary was seeing the bigger picture, however. She pointed out in her response that she knew Castro, a former mayor like herself, had seen the devastating effect foreclosures have on neighborhoods and how those communities turn into something "less than desirable." "is is about bringing people from the lowest common denominator up," Love said. Maine RANK: 5 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate NOVEMBER 2014 3.38% 2.60% 5.5 YEAR AGO 2.59% 4.63% 6.4 YEAR-OVER-YEAR CHANGE 30.5% -43.9% -0.9 Top County SOMERSET COUNTY 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 6.27% 5.48% YEAR AGO 3.77% 9.33% YEAR-OVER-YEAR CHANGE 66.3% -41.3% Top Core-Based Statistical Area LEWISTON-AUBURN, ME 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 4.84% 3.92% YEAR AGO 3.20% 6.43% YEAR-OVER-YEAR CHANGE 51.3% -39.0% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the November 2014 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary November 2014 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. Maryland RANK: 10 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate NOVEMBER 2014 2.70% 2.08% 5.5 YEAR AGO 3.38% 3.06% 6.1 YEAR-OVER-YEAR CHANGE -20.3% -31.9% -0.6 Top County CAROLINE COUNTY 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 4.54% 4.25% YEAR AGO 5.85% 5.30% YEAR-OVER-YEAR CHANGE -22.3% -19.8% Top Core-Based Statistical Area CAMBRIDGE, MD 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 3.52% 3.61% YEAR AGO 4.89% 4.54% YEAR-OVER-YEAR CHANGE -27.9% -20.6% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the November 2014 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary November 2014 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. Massachusetts RANK: 23 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate NOVEMBER 2014 2.89% 1.63% 5.5 YEAR AGO 3.53% 1.82% 7.1 YEAR-OVER-YEAR CHANGE -18.1% -10.3% -1.6 Top County FRANKLIN COUNTY 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 5.02% 3.70% YEAR AGO 5.57% 3.46% YEAR-OVER-YEAR CHANGE -9.9% 6.9% Top Core-Based Statistical Area GREENFIELD TOWN, MA 90+ Day Foreclosure Delinquency Rate Rate NOVEMBER 2014 5.02% 3.70% YEAR AGO 5.57% 3.46% YEAR-OVER-YEAR CHANGE -9.9% 6.9% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the November 2014 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary November 2014 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. Maine's foreclosure inventory declined year- over-year by 49.5 percent in January 2015 from 3.5 percent down to 1.9 percent, the largest decrease among states, according to CoreLogic. KNOW THIS

• Cover