High Rate Of Foreclosure In Rural Aeres Of Western New YORK

February 15th, 2008

The rural portions of Western New York, that is the area from Lakewood and Frewsburg to Gasport and LeRoy, is suffering most due to the meltdown of subprime mortgage. According to a review made by the Buffalo News on Federal Reserve information, the counties of Wyoming and Allegany have a 50 percent higher foreclosure rate than the other parts of that region. However, even though these counties showed a foreclosure rate which was higher than the national average, they were much better off, going by the standards of statewide average according to the data.It is evident from findings that, even though the subprime lending crisis is less severe in the Buffalo Niagara region than on a national basis, its impact is still heavily felt here. Andrew Williams, a Federal spokesman declared that the rate of local foreclosure is much lower compared to the national rate of 7.3 percent. An economist from M&T Bank Corp says that the housing market here isn’t under much stress. This is an important point as the rise in the volume of foreclosures has put a lot of pressure on the prices of local houses.

More and more properties are being put up for sale at a time when the buyer rate has greatly reduced. The highest rate of foreclosure is seen in Lakewood, in Chautauqua County, where among every five subprime loans, one at least faced non-payment. The highest subprime lending activity was in Buffalo, which foresaw a foreclosure rate of 5.5 percent, a rate which is a little lower than the average of Western New York. Two areas in Buffalo particularly have the highest number of subprime loans facing foreclosure. Among the suburbs, Lockport has 16 cases of foreclosure, while North Tonawanda has 15 and the overall rate of foreclosure is around 5 percent.

According to Keith, since there is little activity in the sphere of subprime lending in the areas which are sparsely populated, therefore even a little variation in the sphere of foreclosure activity can cause a noteworthy swing in the overall rate of foreclosure. As the home prices are not that high here, people don’t have to stretch their budgets much to afford a house and most of the local buyers rely greatly on conventional mortgage schemes. However, now the number of subprime mortgage defaulters is hiking up as the housing market is weakening and there are homeowners whose debts are more than their house is worth.