Community Development Papers

Foreclosures on Non-Owner-Occupied Properties in Ohio’s Cuyahoga County: Evidence from Mortgages Originated in 2005–2006

An examination of home buying, borrowing, and mortgage default by non-occupant owners in Cuyahoga County, Ohio, using detailed neighborhood and demographic data.

Richard M. Todd | Vice President and Advisor to the CICD

Published June 30, 2010

One aspect of the past decade's housing boom was an increase in mortgage borrowing by non-occupant owners of residential property. Using data on the 50 states and the District of Columbia, Breck Robinson and Richard M. Todd summarize some of the basic facts regarding home purchases and mortgage borrowing and default by non-occupants who borrowed from 2004 to 2007. However, partly due to data limitations, few studies have examined home buying, borrowing, and mortgage default by non-occupant owners using detailed neighborhood and demographic data, including census tract data on the race and ethnicity of the non-occupant owners who borrowed and subsequently experienced foreclosure. I do so here, using results from loan and foreclosure data on Cuyahoga County, Ohio, that were compiled by researchers at Case Western Reserve University for loans originated in 2005–2006. I find that the incidence of non-occupant foreclosures in Cuyahoga County was very high by national standards and was even higher for loans to minority borrowers made by non-local lenders in low-cost, low-income, minority neighborhoods. Strictly speaking, these findings apply only to Cuyahoga County in 2006–2008, and results in Robinson and Todd suggest that the pattern of non-occupant home buying and borrowing varied significantly among the states. At the same time, Robinson and Todd also show that Ohio’s pattern was similar to some other Midwestern and Northeastern states, suggesting that the more detailed findings here could have some parallels in other cities, at least in the Midwest and Northeast.