Not-so-prime spots

UPDATE: For more recent foreclosure data, go to the Head Count in our Winter 2009 issue.

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home foreclosures in Massachusetts continued to climb this spring—up 40 percent in May compared with the same period last year, according to the Warren Group. The map based on the number of foreclosures during the 180-day period ending on May 30, as reported by ForeclosuresMass. Some of the highest rates, when adjusted for population size, were in towns that have significantly expanded their housing stock over the past few years, including Cape Cod’s Mashpee (68 foreclosures during the period that was studied), Worcester County’s Charlton (29), and South Coast’s Dighton (14). Still, most of the foreclosures overall were in urban areas. There were 1,114 in Boston, though that amounted to a rate of just under 20 for every 10,000 residents. Things were considerably grimmer in Springfield (662 foreclosures, or 44 for every 10,000 residents) and even worse in Brockton (506 foreclosures or 53 for every 10,000 residents).

The latter cities are also distinguished by high numbers of “subprime” mortgages, or home loans with extraordinarily high interest rates that are given to individuals who are considered bad credit risks. According to a January report by the Massachusetts Community and Banking Council (whose members include banks and community groups), 54 percent of all home-purchase loans made to Springfield residents in 2005 had interest rates more than three points above U.S. Treasury securities of the same maturity. The comparable figure in Brockton was 59 percent. Even higher rates included 60 percent in Everett and a staggering 68 percent in Lawrence.

In Boston, the subprime share was only 25 percent for the entire city—but it was 57 percent among blacks and 52 percent among Latinos, versus 13 percent for white borrowers. In Milton, the racial gap was even greater: 50 percent of all home purchase loans to blacks were subprime, versus 7 percent for loans to whites. There was a much smaller difference in Revere, but only because the subprime share of loans to whites was so high (46 percent, versus 61 percent for blacks).