On 31 October CNNMoney.com reported that First American CoreLogic had found 7.5-million home mortgages already “underwater” and another 2.1-million that were on the brink. The International Herald Tribune story cited in EMR’s post “WaPo and IHT Housing and Mortgage Coverage,” 29 October on this Blog pegged the potential for underwater mortgages by 2010 at 19-million.
The CoreLogic report provides underwater numbers by state:
An astounding 49.8% of all mortgages in Nevada are underwater – talk about gambling…
An equally astounding 4.1 million underwater mortgages are in the top five states. These states include Florida and California, two jurisdictions that are often mentioned as leaders in the propagation of dysfunctional settlement patterns at Regional scale.
The two states with the lowest percentage of underwater mortgages were New York and Hawaii.
In New York State (4.4% of mortgages underwater) one factor may reflect Rockefeller administration concern for settlement patterns forty years ago – we did not call it that at the time but that is what was a primary concern as it had been in 1926. Modest rates of Regional growth over the past 40 years in most New Urban Regions that fall all or part with in New York State also helps. Hyper growth yields hyper dysfunction. (Connecticut, New Jersey and Pennsylvania which also have territory in the New York New Urban Region are also in the bottom 10 of underwater mortgages). Another factor is aggressive pursuit of mortgage, insurance and other venues for Enterprise fraud by New York State.
In the number two state, Hawaii (5.6% of mortgages underwater), the settlement patterns are nearly as useful as those of Western Europe for demonstrating the principles of intelligent settlement patterns. This is in spite of real estate churn and flux due to Asian investing. (If they could just get a robust shared-vehicle system up and running in the Oahu New Urban Region…)
EMR uses the terminology “Wrong Size House, Wrong Location” as shorthand for the Affordable and Accessible Housing Crisis and the root cause of the mortgage meltdown. So far it has been ‘Wrong Location’ more than ‘Wrong Size House’ that has shown up in the foreclosure data.
The reason appears to be that a reluctance on the part of mortgagors to foreclose on Big houses in poor locations. The reason may be that in the current market they can not be resold. There are buyers for less expensive dwellings. Frequently the notice of foreclosure sale is followed by a notice of a resale for about the same price – some even higher than the foreclosure price.
That fact indicates special impacts on Households with low Institutional Capacity. Foreclosures of cheap houses in poor locations appear to have an especially big impact on minority homeowners. In the Subregional press, Hispanic surnames are much more frequent in foreclosure notices than in the population in general. Antidotal evidence suggests flight from the inhospitable environment created by Prince William County resulted in imprudent debts.
Prince William’s target may have started out to be ‘illegals’ but the impact appears not to be confined to illegals by any stretch.
Of the 25 counties with the highest rates of increase in Hispanics from 2000 to 2007 in the entire US of A six are in the Virginia portion of the National Capital Subregion. Three are adjacent to Prince William County and two others are not far away.
EMR has stated that those components of urban settlement where SYNERGY has identified high percentages of foreclosure are orphan subdivisions in dysfunctional locations vis a vis Jobs / Services / Amenity.
The pictures used to illustrate MainStream Media coverage of the mortgage meltdown look like poster children for settlement pattern dysfunction but that is not a statistically valid guide.
State-wide and municipal / Planning District data can misleadingly mask what is happening in the organic components of a New Urban Region.
Here is an exercise for those who have any doubt about the Wrong Location part of the Wrong Size House / Wrong Location paradigm:
Locate Cluster-scale, Neighborhood-scale and Village-scale urban agglomerations with high percentages of foreclosures. Then determine, based on Google Maps or other resources, if these places are in components of urban settlement that have any chance of becoming contributors to the evolution of Balanced Communities.
EMR