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Title
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History of Foreclosures and Tax Liens of Mt. Hope
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Date
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2023
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Description
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Student presentation on the history of foreclosures and tax sales of Mt. Hope between 2009 and 2023, from AFRI1075 course: Providence Housing Ecosystem: Development, Displacement, and Gentrification and the Root Shock PowerPoint presentation and
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Format
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mp4
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Language
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English
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Contributor
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Keiley Thompson, Lillian Bernstein, Samuel Lynch, Victoria Von Redden, Sydney Rosant, Toby Arment
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transcript of
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Speaker 2 [00:00,131 - 01:04,249]: Yeah. So this is the second portion, which will be analyzing the more contemporary history of a specific amount of hope that resulted from the racist legacy of the foreclosure crisis starting in 2009 and analyzing all the way to today. providing an analysis of how this period impacted the neighborhood. We're going to be looking at making further our research and also advocate for better policy to change the racist effects of the social crisis. Give a little quick background. This neighborhood is roughly bordered by only street on the south, Hope Street to the north or to the east, Rochambeau to the north, and the railroad on the west. Mount Hope contains lower and middle-income residences, as well as the historic 110-acre North Vail ground, the basic commercial district along North Main Street, and the industrial and commercial area to the west of Main Street. The order of this, you can see, oh, sorry. The purpose, and then we'll get onto some background, talk about foreclosures, talk about demographic changes, the results of the foreclosure crisis, and then we'll discuss our data collection, its limitations, and policy and research recommendations.
Speaker 1 [01:09,370 - 02:12,061]: So we wanted to start by kind of just explicitly stating our purpose in this kind of exploratory research study. We want to document the trends in residential foreclosures and tax sales in Mount Hope in order to better understand historical and ongoing trends in serial displacement, asset extraction and exploitation in historic and current Black communities. So to start off with, we wanted to set some definitions for foreclosure and tax bill, kind of simplified versions, but we thought that fit into our analysis. So we defined foreclosure as the legal or illegal process through which a lender forces a borrower to sell an asset using the asset as collateral to pay off the remaining loan balance. In this case, the asset will refer to a house or home. And this generally results in the repossession of a home to the lender and ultimately displacement, usually involuntary, of the person living in the house. We define a tax sale as the sale of real estate property that results when a taxpayer reaches a certain point of delinquency in their own property tax payment.
Speaker 2 [02:16,988 - 03:04,013]: I'll give some background on the neighborhood we're talking about. As I mentioned earlier, the boundaries you can see. The neighborhood is one of two neighborhoods in Providence that was entirely redlined by the Homeowners Loan Corporation in the 1930s. And that legacy is part of why we are talking about this project today, persisted. In the 1960s and 70s, over 700 houses were acquired and destroyed to build the interstate and USPS distribution center. So the legacy of dispossession has not stopped with the legacy of urban renewal and certainly continues to the foreclosure crisis. And the Lippitt Hill development project displaced over 700 families in the southern section of the neighborhood. The neighborhood of, sorry. Go ahead, Kylie.
Speaker 0 [03:04,355 - 03:36,175]: Oh, and this map just kind of shows like before and after construction of Interstate 195 and kind of how it just went right through the neighborhood and also cleared out a bunch of the homes. You can see the density is completely different. And like a lot of these projects kind of just work to displace a lot of people. for the benefit of the greater good, as a lot of the government agencies put it, but ultimately took away from the community aspects that led to these being thriving communities.
Speaker 1 [03:43,198 - 06:02,450]: So we kind of wanted to lay out the general foreclosure process in the United States, which as you can see here, it's quite complicated. Cindy, you can speak to this too whenever you want to butt in. But to the right is just a flow chart that was taken from the Federal Home Finance Agency. So basically, there's two main types of foreclosures. There's non-judicial foreclosures and judicial foreclosures. So non-judicial foreclosures generally have a power of sale written into their agreement and into the loan agreement that you sign. What this means is that the lender has the right to repossess that house and sell it or force the borrower to sell that house in the case where they're delinquent on that loan. So ultimately, non-judicial foreclosures, in general, they have less protection for the borrower, at least before the 2009 Dodd-Frank Act and still arguably today. A judicial foreclosure generally is when there's no power of sale written into the mortgage deed. So in order to foreclose a house, a borrower has to directly file a lawsuit in order to either seek eviction or seek a foreclosure. So generally, when there's a non-judicial foreclosure, that usually leads to a notice of default. And then after 120 days of delinquency, which is an extended time that was created in the 2009 Dodd-Frank Act in order to prevent foreclosures after the banking crisis in 2008. This also required like a mediation session. So in Rhode Island, what this means that if you haven't, or if you're behind on your loan payments by 120 days, The bank is required to send you a letter and also Rhode Island Housing to schedule a mediation conference between the borrower, a certified member of the HUD agency, and a member of Rhode Island Housing to try to find alternative options rather than foreclosure. So this could have to do with refinancing or a short sale, but ultimately could also lead to foreclosures in general. And then Cindy, if you wanna walk through a little bit of the foreclosure process in Rhode Island.
Speaker 3 [06:03,210 - 06:30,868]: Yes, so specifically in Rhode Island, most of the foreclosures are non-judicial and lenders are required to schedule a mediation conference with the borrower, HUD agent, and Rhode Island housing employee and issue a notice of intent. However, the Madeline Walker Act does allow Rhode Island housing to purchase and hold tax liens for up to five years, and this helps the lender create a payment plan, connect them to housing counseling, and direct them towards other community resources that they might need.
Speaker 2 [06:37,629 - 07:50,613]: Here's a chart from Housing Works Rhode Island of the number of foreclosures that happened each year in Rhode Island and their impact on single family and multifamily homes. And then you can see the total that happened in each year. You can see obviously it was the largest part of the crisis spiked in 2009, but there continues to be a huge amount of foreclosures every year afterwards that has a huge impact on the city and the neighborhood specifically. So A couple of things to note, the process period for foreclosures in Rhode Island is 120 days, which means that from the initiation of the foreclosure to when the home becomes, or when the borrower becomes delinquent on the loan and the home is repossessed is 120 days. Also in Rhode Island, there is no redemption period for non-judicial foreclosures, which as was mentioned earlier, is the vast majority of foreclosures. In some states, there is a redemption period, which means that the homeowner can redeem their home from the buyer if they pay them, like if they reimburse them for the sale of the home. But that does not exist in Providence, so there is no capacity for you to leave or leave your home. And additionally, just for some general data about Rhode Island, well, this is the report about Rhode Island. Providence has the highest rate of foreclosures in the state.
Speaker 4 [07:50,653 - 11:43,502]: So we wanted to talk a little bit about the effects of foreclosure. And so we kind of looked at employment, health, education, and credit score. So I found a study, a few studies, and this one study about employment specifically address delayed foreclosure. So as you saw before, the process of foreclosure can be really complicated. And because there's so many steps, it can be a month long, it can be month long, basically. And so the longer it tends to be, the less likely a person is able to find some form of employment. Interestingly, interestingly enough, the study also found that if somebody does find employment, it tends to be a better job with a higher wage. But then again, it's like that's only if they do find employment and their chances of that happening does decrease in that time. When it came to health, there was a study that showed that. Increase in foreclosures led to increases in hospital emergency room visits for mental health issues, heart attacks and strokes. And then there was also an increase in conditions such as hypertension, which could usually is caused by just a lack of accessibility to health care and just not accessing the right resources to address those health issues. In some of the studies that I found for education, there was a correlation between increased foreclosures and a decrease in test scores and attendance for the children in those households. I just want to emphasize, again, the word correlation, because a lot of them did not want to specify that foreclosures are the cause, but there is a correlation there. And that should definitely be explored further. And then finally, with credit score, credit score tends to be, I think, the most important impactful thing here. And the reason why is because a foreclosure can decrease a person's credit score about 100 points. So at the bottom here, I kind of included one of these like credit scales that I've seen a bunch in all these like credit companies and the barriers for what's considered excellent, good, fair, or bad can be arbitrary sometimes, but this tends to be like the general range for each like credit score or um, and infer in terms of like excellency, good, like bad, whatever. Um, and so basically if you can see here, if you have like a seven 20 credit score, that's considered excellent. But if you, um, went through foreclosure and you experienced a decrease about a hundred points, then you're already put in six 20, um, in the six 20 range, which is considered bad. Um, and additionally, there were also, there were studies that showed that, um, the higher your credit score is, the more it will decrease when you undergo foreclosure. And then finally, if you miss a certain amount of payments for your mortgage and you're about, you're almost within the range of getting foreclosed, that's like the pre-foreclosure time period. You can also get a decrease and your credit score can negatively be affected during that time period. So before you even go through the foreclosure process, if you're in like a pre foreclosure status. you can get a decrease in your credit score and that can also negatively impact you. And the reason why it's really important to have a good credit score is because a lot of employers associate good credit score with financial literacy and responsibility. So if you have a bad credit score, a lot of employers tend to not hire you because they think that you are not responsible. It will also impact the amount of loans or mortgages you can get from a bank. So usually if you have a lower credit score, a bank is less likely to give a loan or mortgage. And if they do give that loan or mortgage, it tends to be with an increased interest rate. So credit score is really important here, especially with foreclosure, and it can really impact various parts of a person's life.
