GOOD NEWS ON FORECLOSURES

Originally published in the Philadelphia Daily News on September 6, 2006

RATES DECLINE, BUT DON'T THROW PARTY YET

Pinch us, we must be dreaming.

Foreclosure rates in the city are on the decline, according to Sheriff John Green's office. In 2005, foreclosure sales in Philadelphia fell 22.3 percent from the previous year. This year, May represented the fourth straight month that the region saw a decline in foreclosure activity, with a 24 percent decrease.

This is extremely good news for a city that has suffered a depressing number of people losing their homes to foreclosures. Last year, for example, Philadelphia ranked second in foreclosures among the Pennsylvania counties studied by the state Banking Department. And in a state that itself ranks ninth in the nation for prime loan foreclosures and fourth in the nation for subprime foreclosures, Philadelphia's rank was a serious concern for the future growth of the city.

According to Green's office, the number of residential and commercial properties that sold at foreclosure auction dropped from 2,820 in 2004 to 2,189 in 2005. For this year, May's foreclosure rate -711 properties - was more than 20 percent down from the previous month, and capped four straight months of declines.

Those declines are heartening, if, that is, you consider hundreds of people still losing their homes each month to be good news.

Indeed, our numbers are bucking the national trends being reported by RealtyTrac, which points to increases in national foreclosures last year, and some increases in early 2006 - trends more consistent with economic indicators such as a flattening housing boom and rising interest rates.

We don't know why Philadelphia is bucking those trends, but it's probably a good idea to sleep with one eye open. The foreclosure problem is not going away. Historically, high rates of predatory loans have driven a big part of the city's foreclosure rates, and legislative controls on sub-prime lending fall far short of where we need to be.

Finally, Philadelphia Unemployment Project, which has been an effective local champion on the foreclosure issue, still thinks the sheriff could lower the fee he charges homeowners who must sell at foreclosure. We agree.

Those fees help pay for the advertising the sheriff is legally required to run, and thanks to PUP's efforts, those ads can be streamlined, with savings passed on to the homeowners who, in the process of losing everything, can least afford them.