An analysis of home mortgage data by Case Western Reserve University's Center on Urban Poverty and Community Development finds that home purchase loans have been stalled with a fall in conventional mortgage lending, with the eastern side of Cleveland and the inner-ring suburbs experiencing "drastic declines," according to the center's November 2009 "Behind the Numbers" report.
The center, housed within the Mandel School of Applied Social Sciences examined data from 1995-2008 provided by the Home Mortgage Disclosure Act (HMDA) to find that the drop-off in high-cost lending is responsible for a disproportionate share of the loss.
During the period in which the center analyzed home purchase data, Cleveland's purchases rose from 4,673 in 1995 to 7,128 in 2005—a 53 percent increase. An increase of 49 percent was slightly smaller for the county with purchases rising during that period from 17,275 to 25,698.
Between 2002 and 2005 home purchase loans fueled by high-cost lending grew at greater rates in Cleveland and Cuyahoga County. As the effects of the mortgage crisis began to be felt, dramatic decreases in lending began.
In 2008 only 1,863 home purchase loans were made in Cleveland, a 74 percent decrease from 2005. The trend in the overall county was similar with only 10,156 loans in 2008, a 60 percent decrease from its 2005 high.
The report was written by Diwakar Vadapalli, a doctoral research fellow at Case Western Reserve; April Hirsh, research assistant; Claudia Coulton, the center's co-director; and Michael Schramm, the center's associate director.
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