By MATT CHANDLER
Buffalo Law Journal

Nearly three years of work coordinated by the Western New York Law Center culminated Thursday with the release of a comprehensive study exploring what Kathleen Lynch, who oversaw the project, called "the foreclosure crisis" in Erie County.

The study, which researched more than 5,000 mortgages that went into foreclosure over a two-year period, is the largest study of its kind to address the foreclosure issue in Western New York.

The findings may not shock many people - the highest concentration of foreclosures occurred on Buffalo's East Side and in nearby zip codes, and a disproportionate amount of foreclosures come from subprime loans, those loans often given to borrowers with lower creditworthiness.

Lynch, who said many of those borrowers are victims of predatory lenders, noted that the aim of the study is to clarify the true number of foreclosures and to provide important information to both municipal leaders and borrowers, to educate them and avoid future mortgage fallouts.

"We felt like we had to do the study to find out what was going on," she said. What they found, in addition to the expected data, was the fact that one in three subprime mortgages in tonier areas such as Amherst went into foreclosure between 2007 and 2008, and many of the foreclosed properties came from mortgages originated in the last three years.

"We feel like if there had been something like this (study, but on a national level), we could have seen this coming before it caused a national crisis," she said.

Lynch said some mortgage lenders and financial institutions prey on borrowers, charging interest rates in some cases over 20 percent.

"Those loans were destined to go into foreclosure," she said. "No one could be expected to keep making those kind of payments."

Though 2,710 lis pendens actions (the first step in the foreclosure process) were filed in Erie County in 2007, the study revealed that only 35.9 percent of those were actually foreclosed on.

Despite that number, Lynch said there is still cause for concern going forward, despite government regulations put in place in the last 12 months to protect homeowners facing foreclosure.

"This is an issue that affects renters as well. Everyone is impacted, and we are hopeful that this report can be helpful to prevent these types of harmful trends from happening in the future," she said.

To view the complete results of the study, see wnylc.net.