WASHINGTON – During the next two years, one in every 31 Rhode Island homeowners is projected to face foreclosure, according to a national study by The Pew Charitable Trusts.
Ocean State homeowners are likely to lose an average of $7,008 in property value because of foreclosures on neighboring homes, the report adds. Released Wednesday, it is a joint effort between the Pew Center on the States and Pew’s Health and Human Services Program.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
Neighboring Massachusetts and Connecticut are both expected to fare better than Rhode Island. In Massachusetts, foreclosures are expected to hit one in 48 homes over the next two years, while in Connecticut, one in 49 homeowners will face foreclosure. The national rate of homeowners facing foreclosure over that period is projected at one in 33.
The projections are partially based on the percentage of loans awarded in 2005 and 2006 that qualified as subprime loans, the nonprofit said. Rhode Island’s percentage of such loans (28 percent) was higher than in either Massachusetts (20 percent) orConnecticut (23 percent), the study found.
(In March, one foreclosure filing was reported for every 557 U.S. households, according to RealtyTrac Inc. Rhode Island had one foreclosure filing for every 1,130 households – or less than half the national rate – while Massachusetts had one for every 486 households. READ MORE)
“Stronger standards from federal policy makers could have helped avert this crisis,” Shelley A. Hearne, managing director of Pew’s Health and Human Services Program, said in a statement. “Future legislation must consider ways to strengthen standards to prevent more troubling loans from being made,” she said.
“Let’s make certain federal laws build upon, rather than preempt, the strong and smart state efforts already underway and ensure that states retain flexibility to respond to local circumstances.”
The study found, for instance, that states including Rhode Island and Massachusetts already require lenders to assess homeowners’ ability to pay even after the rate resets on an adjustable-rate mortgage. Both also “require lenders to underwrite mortgages at [that] fully indexed interest rate,” the report notes.
The Pew Charitable Trusts is a 60-year-old nonprofit committed to helping find fact-based solutions to issues confronting society. For additional information – including the full national report, “Defaulting on the Dream: States Respond to America’s Foreclosure Crisis” – visit www.pewtrusts.org.
