Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Low-income, Vulnerable Homeowners Need Support After Purchase to Avoid Foreclosure

21.11.2008
Programs that help low-income and minority individuals and families purchase a home may be doing more harm than good, according to a Kansas State University economist.

Programs that help low-income and minority individuals and families purchase a home may be doing more harm than good, according to a Kansas State University economist.

When vulnerable homeowners don't get support after they purchase a home -- maybe one they really couldn't afford in the first place -- they're more likely to return to renting, said Tracy Turner, K-State assistant professor of economics. She and Marc Smith, professor of finance and director for the Institute of Housing Studies at DePaul University, are publishing their research in a forthcoming issue of the Journal of Regional Science.

"Moving vulnerable renters into homeownership without post-purchase support wastes tax dollars as well as creates great hardships for these new homeowners who lose their homes," Turner said. "Our research sheds light on homeowner sustainability and the need for post-purchase support for vulnerable households. It suggests that past homeownership policies are in part contributing to the current home foreclosure crisis."

Turner and Smith studied how populations with low homeownership rates also leave homeownership at high rates, either through foreclosure or selling the home. From 1970 to 2005, they found that low-income homeowners were consistently more likely to exit homeownership than higher income households. Hispanic households had higher exit rates before 1997 but not after.

They also found that a gap between blacks and whites exiting homeownership arose after 1997. Turner said this could be because policies in the 1990s that encouraged minority homeownership were not sustainable in the long term.

"Policy initiatives made resources available to move renters into owning although they could not own without assistance, and these initiatives failed to provide post-homeownership counseling or support," Turner said. "As a result, renters who became homeowners through relatively easy entry conditions could not sustain homeownership."

Turner said their research is the first to find that the homeownership gap before 1997 is because fewer blacks were becoming homeowners in the first place, not because they were leaving homeownership at higher rates.

Because homeownership offers many benefits, Turner said it is important to understand why black, Hispanic and low-income households are less likely to own their housing. As renters, they are missing out on the benefits homeownership can provide.

"In order to design policies that will allow underrepresented groups to attain homeownership and remain homeowners, we need to understand why certain groups have lower homeownership rates to begin with," she said.

An important area of future research, Turner said, would be to look at how much of the foreclosure crisis is attributed to these types of policies versus how much of it is because of liberalized lending standards, predatory lending and house-price declines.

Tracy Turner | Newswise Science News
Further information:
http://www.k-state.edu

More articles from Business and Finance:

nachricht Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik

nachricht RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Breaking the bond: To take part or not?

Physicists working with Roland Wester at the University of Innsbruck have investigated if and how chemical reactions can be influenced by targeted vibrational excitation of the reactants. They were able to demonstrate that excitation with a laser beam does not affect the efficiency of a chemical exchange reaction and that the excited molecular group acts only as a spectator in the reaction.

A frequently used reaction in organic chemistry is nucleophilic substitution. It plays, for example, an important role in in the synthesis of new chemical...

Im Focus: New 2D Spectroscopy Methods

Optical spectroscopy allows investigating the energy structure and dynamic properties of complex quantum systems. Researchers from the University of Würzburg present two new approaches of coherent two-dimensional spectroscopy.

"Put an excitation into the system and observe how it evolves." According to physicist Professor Tobias Brixner, this is the credo of optical spectroscopy....

Im Focus: Chemical reactions in the light of ultrashort X-ray pulses from free-electron lasers

Ultra-short, high-intensity X-ray flashes open the door to the foundations of chemical reactions. Free-electron lasers generate these kinds of pulses, but there is a catch: the pulses vary in duration and energy. An international research team has now presented a solution: Using a ring of 16 detectors and a circularly polarized laser beam, they can determine both factors with attosecond accuracy.

Free-electron lasers (FELs) generate extremely short and intense X-ray flashes. Researchers can use these flashes to resolve structures with diameters on the...

Im Focus: Probing nobelium with laser light

Sizes and shapes of nuclei with more than 100 protons were so far experimentally inaccessible. Laser spectroscopy is an established technique in measuring fundamental properties of exotic atoms and their nuclei. For the first time, this technique was now extended to precisely measure the optical excitation of atomic levels in the atomic shell of three isotopes of the heavy element nobelium, which contain 102 protons in their nuclei and do not occur naturally. This was reported by an international team lead by scientists from GSI Helmholtzzentrum für Schwerionenforschung.

Nuclei of heavy elements can be produced at minute quantities of a few atoms per second in fusion reactions using powerful particle accelerators. The obtained...

Im Focus: Asymmetric plasmonic antennas deliver femtosecond pulses for fast optoelectronics

A team headed by the TUM physicists Alexander Holleitner and Reinhard Kienberger has succeeded for the first time in generating ultrashort electric pulses on a chip using metal antennas only a few nanometers in size, then running the signals a few millimeters above the surface and reading them in again a controlled manner. The technology enables the development of new, powerful terahertz components.

Classical electronics allows frequencies up to around 100 gigahertz. Optoelectronics uses electromagnetic phenomena starting at 10 terahertz. This range in...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

11th European Wood-based Panel Symposium 2018: Meeting point for the wood-based materials industry

03.07.2018 | Event News

Nanotechnology to fight cancer: From diagnosis to therapy

28.06.2018 | Event News

Biological Transformation: nature as a driver of innovations in engineering and manufacturing

28.06.2018 | Event News

 
Latest News

Project completion of 5G-CHARISMA: Successful Development of new Network Architectures for the 5G

11.07.2018 | Information Technology

Underlying mechanism discovered for magnetic effect in superconducting spintronics

11.07.2018 | Physics and Astronomy

Wetting of surfaces is surprisingly difficult to measure reliably

11.07.2018 | Materials Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>