Neighborhood Level Foreclosures in
Durham County:
Overview and Location of Foreclosure Starts
Report #1
November 2013
UNC Center on Poverty, Work and Opportunity
Neighborhood Level Foreclosures in Durham: Report #1
2
Acknowledgments
Special thanks to the Office of the Attorney General for the State of North Carolina for making this research
possible. Thanks also to Center on Poverty, Work and Opportunity research fellow, Joseph Polich, and
research assistants Stephanie Mellini, Kat Gardzalla and David Harper.
About the Center
The Center on Poverty, Work and Opportunity is a nonpartisan, interdisciplinary research center located in
the UNC School of Law created to study, examine, document, and advocate for proposals, policies and
services to mitigate poverty in North Carolina and the nation.
Contact information:
323 W. Barbee Chapel Road
Campus Box #3382
Chapel Hill, NC 27599-3382
919.445.0196
poverty_center@unc.edu
www.law.unc.edu/centers/poverty/
UNC$Center$on$Poverty,$Work$and$Opportunity
Neighborhood Level Foreclosures in Durham: Report #1
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Introduction
As part of its Foreclosure Project, the UNC Center on Poverty, Work and Opportunity is examining
residential foreclosure filings on a local level in North Carolina. While much research has been conducted
looking at broad, aggregate measures, less attention has been paid to the details surrounding individual and
neighborhood foreclosure filings. Taking a deeper look at these local level filings helps to fill this knowledge
gap by providing detailed information on which areas were most heavily affected, their demographic and
socioeconomic traits, the types of mortgages that were being made and by whom, and the larger
neighborhood costs imposed by foreclosure.
This first report will introduce our first location, Durham County, and its general attributes (Map 1).i It will
then describe which census tracts in Durham bore the brunt of the foreclosure crisis according to our
research.
The foreclosure data contained in this and forthcoming reports comes from foreclosure filings on record in
the Clerk of Courts’ office in the Durham County Courthouse. In North Carolina, most foreclosures are
nonjudicial.ii This means that a lender does not need to bring a lawsuit in order to foreclose on a property.
Instead, a clerk of court conducts a hearing in order to determine whether a foreclosure sale can take place.
The files we examine represent foreclosure starts (the lender has begun a foreclosure proceeding that may or
may not end in a foreclosure sale) and they contain publicly available documents related to the foreclosure
hearing. These documents disclose a wealth of information such as mortgage terms, the identities of key
players (lenders, trustees and other parties), related proceedings (such as bankruptcy), the eventual outcome
of the process, and more.
At this point, we have collected data on just under 200 residential foreclosure filings in Durham County.
Almost all of these files were opened in January and February 2011 and they represent approximately 13%
of all foreclosure filings (home and business) for Durham County in 2011.iii We selected 2011 as the first
year of study because it seemed like a pivotal juncture: foreclosures in Durham were declining; a number of
state and federal programs had been established to assist struggling homeowners; the Great Recession had
ostensibly come to an end. We were curious: was this the dawn of a rosier era for homeowners or business as
usual?
As we continue to collect data, we want to share some of the findings we already have. Over the next few
months, we will release a series of short reports, each one describing a facet of this initial sample. This
report, the first in the series, is an overview. It will show where our sample foreclosures were occurring at
the time the file was opened and identify census tracts that may be of concern.
UNC$Center$on$Poverty,$Work$and$Opportunity
Neighborhood Level Foreclosures in Durham: Report #1
Overview
Durham possesses a number of characteristics that make it attractive as a starting point for this research.
The county, and its main city (also called Durham), are large and diverse. The county’s population is just
under 280,000, making it the sixth largest in the state.iv Most county residents live in the city of Durham,
which is North Carolina’s fourth largest municipality.v The county is racially diverse: 43% of residents are
white; 37% are African American; 13% are Hispanic and 4% are Asian.vi The county includes dense urban
tracts and less populated rural areas. Poverty, employment and income differ greatly by census tract, as do
homeownership rates and housing values.
Map 1: Durham County
All#maps#made#using#QGIS#
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Neighborhood Level Foreclosures in Durham: Report #1
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Home and business foreclosures in Durham accelerated rapidly in the early 2000s, jumping from 790 in 2001
to 1,107 in 2002 and climbing steadily to a peak of 1,792 in 2009.vii They began to fall again in 2011 and
2012, dropping to 1,160 in 2013. According to an analysis done by the North Carolina Justice Center,
Durham’s foreclosure rate held steady at around .65% between 2007 and 2010, which includes the years
with the highest number of foreclosures. During the same time, North Carolina foreclosure rate ranged from
.55% to .72%, putting Durham on par with state rates.viii
Number#of#foreclosure#filings#in#NC#
70,000#
2,000#
1,800#
60,000#
1,600#
50,000#
1,400#
1,200#
40,000#
1,000#
30,000#
800#
600#
20,000#
400#
10,000#
200#
0#
0#
Number#of#foreclosure#filings#in#Durham#County#
Figure 1: Foreclosure Filings in NC and Durham County, 1998-2013
NC#
Durham#
County#
Source:#NC#Administrative#Office#of#the#Courts#
Location of Foreclosures and Burdened Census Tracts
Since 2010, Durham County has been divided into 60 census tracts by the U.S. Census Bureau. Forty-six
tracts are represented in our sample; fourteen do not have any of our sample’s foreclosure starts. Map 2
shows that most of the foreclosure starts in our sample are located in or near the city of Durham. The main
exceptions are located in Census Tract 21, north of the city, near the unincorporated community of Bahama.
Generally, however, most addresses are found in the neighborhoods around the city center and to the east.
UNC$Center$on$Poverty,$Work$and$Opportunity
Neighborhood Level Foreclosures in Durham: Report #1
Map 2: Location of Residential Foreclosure Starts in Durham
Source:#Foreclosure#Project#data#
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Neighborhood Level Foreclosures in Durham: Report #1
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Although difficult to see on the map above, some of these foreclosure starts are found in small clusters. The
existence of these clusters, despite our relatively modest sample size, is alarming. Their appearance
suggests that pressures or conditions within some neighborhoods led to a concentration of foreclosures. In
some cases, multiple addresses on the same block or in the same complex went into foreclosure during the
period of this study, including residences on Pommel Lane, Horton Road, Charles Street, Southgate Street,
Cultivar Lane, Chimney Ridge Place and Bellenden Drive, among others. We will note whether this pattern
continues as we collect more data.
Map 3: Example of Foreclosure Clusters
Source:#Foreclosure#Project#data#
While some census tracts may not appear in our sample due to chance, certain environmental features may
also explain their absence. The group of green-shaded tracts in the center of Map 2 includes Duke
University’s east and west campuses, undeveloped Duke Forest, the Ninth Street and Main Street
commercial areas, two large green spaces (a golf course and country club) and the historic Old West Durham
and Watts-Hillandale neighborhoods. Tract 9801 encompasses much of the Research Triangle Park and has
a negligible residential population. While over 5000 people each live in tracts 20.15 and 20.16, these tracts
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Neighborhood Level Foreclosures in Durham: Report #1
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stretch alongside Highway 15-501, a major commercial strip, and the homeownership rate is low. Tract
20.19, although in Durham County, is part of the Town of Chapel Hill and a significant portion of the tract is
made up of a golf course and a biological preserve. Some of these tracts may reveal foreclosure starts once
we collect more data, but some—whether due to a large student population, nonresidential land uses or
other characteristics—are unlikely to generate home foreclosures.
The next two maps display the number of foreclosure starts per tract and the foreclosure start rate. Map 4
simply confirms, in a clear and immediate way, what Map 2 suggests: that tracts in eastern Durham
experienced the highest number of foreclosure starts during the time period covered by our sample. But it
also reveals that tracts 17.08 and 17.09 north of downtown Durham also contained a relatively large number
of starts.
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Neighborhood Level Foreclosures in Durham: Report #1
Map 4: Number of Foreclosure Starts in Durham
9
County
Source:#Foreclosure#Project#data#
While the number of foreclosure starts is an important measure, it can be deceptive. On a proportional
basis, a tract with a large population of homeowners will yield more foreclosure starts than another tract
with fewer homeowners because the pool of potential foreclosures is bigger. This can mask tracts that do not
have many starts in absolute terms, but whose residents are experiencing foreclosures at a higher frequency.
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Neighborhood Level Foreclosures in Durham: Report #1
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Map 5 provides a corrective by presenting the foreclosure start rate. To determine the foreclosure start rate,
we divided the actual number of foreclosure starts per tract from our sample by the American Community
Survey’s estimate of the number of owner-occupied housing units with a mortgage.ix
Map 5: Foreclosure Start Rate in Durham County
Source:#Foreclosure#Project#data#
UNC$Center$on$Poverty,$Work$and$Opportunity
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Map 5 shows how different tracts come to the fore when we look at rate instead of number. While the tracts
on the city’s eastern fringe that had the largest number of foreclosure starts also show a relatively high
foreclosure start rate, the tracts with the highest rate have shifted toward the city’s center.
For most tracts with foreclosure starts, the rate is fairly low, as would be expected from our limited sample
(see Appendix A for foreclosure start rates for all census tracts). Most tracts have a foreclosure start rate
less than 1% of owner-occupied homes with mortgages. Alarmingly, however, eight tracts suffered rates
higher than 1%, meaning that more than one out of one hundred owner-occupied homes with a mortgage in
these tracts were involved in a foreclosure during the two-month time period covered by our sample. One
tract, 23, shows a startling foreclosure start rate of 36.36%—by far the highest in this sample. This tract
had a very low number of owner-occupied homes with mortgages (11), so the four foreclosure starts that
occurred there during the study period have an inordinate impact. This snapshot may capture an
anomalous moment in time or it may indicate that neighborhoods in certain tracts are unusually vulnerable
to foreclosure.
Table 1: Most Burdened Tracts by Number and Rate of Foreclosure
Census&tracts&with&most&
foreclosure&starts&
18.07#
18.02/18.06#
18.01#
17.09#
18.08/17.08#
16.01#
20.26/20.13/20.20/#
#
#
#
Number&of&
foreclosure&starts&
18#
12#
10#
9#
8#
6#
5#
#
#
#
Census&tracts&with&highest&rate&of&
foreclosure&starts&
23#
9#
15.02#
17.09#
13.04#
11#
10.02#
17.08#
10.01#
18.02#
Source: Foreclosure Project data
UNC$Center$on$Poverty,$Work$and$Opportunity
Rate&of&foreclosure&starts&
36.36%#
4.88%#
3.51%#
2.17%#
1.68%#
1.30%#
1.28%#
1.04%#
.98%#
.95%#
Neighborhood Level Foreclosures in Durham: Report #1
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Conclusion
When compared to the state foreclosure rate for 2011, Durham County seems unexceptional. A closer look,
however, reveals that wide variation exists between census tracts. For tracts with relatively high numbers
of foreclosure starts, a partial explanation is the substantial homeowner population from which foreclosures
can arise. This is not entirely persuasive since a number of high foreclosure start tracts do not contain many
homeowners and conversely, some tracts with few foreclosure starts have a large pool of homeowners. More
disturbing is the geographic clustering of foreclosure starts and their high concentration in specific
neighborhoods. In the next report, we will delve into the demographic and socioeconomic characteristics of
tracts that are especially troubled by foreclosure, and compare them to tracts with few or no foreclosures.
UNC$Center$on$Poverty,$Work$and$Opportunity
Neighborhood Level Foreclosures in Durham: Report #1
Appendix A
Table 1: Foreclosure Start Rate by Census Tract
Census&tract&
Total&number&of&
foreclosures&in&sample&
23#
Number&of&owner8occupied&homes& Foreclosure&rate&
w/&mortgage&
4#
11#
36.364%#
9#
4#
82#
4.878%#
15.02#
2#
57#
3.509%#
17.09#
9#
415#
2.169%#
13.04#
2#
119#
1.681%#
11#
1#
77#
1.299%#
10.02#
4#
312#
1.282%#
17.08#
8#
767#
1.043%#
10.01#
3#
305#
0.984%#
18.02#
12#
1,262#
0.951%#
2#
4#
467#
0.857%#
18.07#
18#
2,275#
0.791%#
14#
1#
129#
0.775%#
18.06#
12#
1,585#
0.757%#
1.01#
4#
547#
0.731%#
18.01#
10#
1,476#
0.678%#
13.03#
1#
157#
0.637%#
18.08#
8#
1,338#
0.598%#
7#
3#
538#
0.558%#
20.26#
5#
909#
0.550%#
17.11#
1#
197#
0.508%#
20.21#
4#
797#
0.502%#
6#
4#
799#
0.501%#
20.13#
5#
1,154#
0.433%#
18.09#
4#
984#
0.407%#
20.28#
3#
749#
0.401%#
16.01#
6#
1,579#
0.380%#
5#
1#
264#
0.379%#
20.09#
3#
826#
0.363%#
17.10#
3#
838#
0.358%#
20.20#
5#
1,725#
0.290%#
21#
4#
1471#
0.272%#
20.08#
2#
838#
0.239%#
16.03#
4#
1,704#
0.235%#
20.25#
4#
1,800#
0.222%#
20.24#
4#
1,962#
0.204%#
UNC$Center$on$Poverty,$Work$and$Opportunity
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Neighborhood Level Foreclosures in Durham: Report #1
#
#
#
#
Census&tract#
Number&of&owner8occupied&homes&
w/&mortgage#
495#
Foreclosure&rate#
20.23#
Total&number&of&
foreclosures&in&sample#
1#
19#
1#
582#
0.172%#
16.04#
3#
1830#
0.164%#
20.18#
2#
1384#
0.145%#
20.17#
2#
1412#
0.142%#
17.06#
1#
776#
0.129%#
17.07#
2#
1614#
0.124%#
20.22#
1#
832#
0.120%#
20.27#
1#
969#
0.103%#
20.07#
1#
1351#
0.074%#
0.202%#
Source:#Foreclosure#Project#data#and#2011#American#Community#Survey#5RYear#Estimates#
Table 2: Number of Owner-occupied Homes with a Mortgage in Census Tracts with No
Foreclosure Starts
Census&tract&
1.02#
3.01#
3.02#
4.01#
4.02#
13.01#
15.01#
15.03#
17.05#
20.15#
20.16#
20.19#
22#
9801#
#
Number&of&owner8occupied&homes&w/&
mortgage&
658#
355#
#
545#
#
604#
#
166#
#
71#
#
0#
#
0#
#
778#
#
370#
#
161#
#
854#
#
132#
#
25#
#
Source:#2011#American#Community#Survey#5RYear#Estimates#
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Neighborhood Level Foreclosures in Durham: Report #1
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Endnotes
All the maps in this and subsequent reports were created using QGIS. Quantum GIS Development Team,
2013, Open Source Geospatial Foundation Project, http://qgis.osgeo.org.
i
ii
North Carolina law allows judicial and nonjudicial foreclosures. Judicial foreclosures occur when then the
mortgage or deed of trust does not have a power of sale provision. Since a large preponderance of mortgages
and deeds of trust have such a provision, most foreclosures are nonjudicial.
iii
North Carolina Administrative Office of the Courts, “Civil Cases with a Home or Business Foreclosure
Filing, By Filing Date Through March 31, 2014, Compiled April 14, 2014,”
http://www.nccourts.org/Citizens/SRPlanning/Documents/foreclosure.xls.
iv
U.S. Census Bureau, Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2012, 2012
Population Estimates.
v
U.S. Census Bureau, Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2012, 2012
Population Estimates.
vi
2011 American Community Survey 5-Year Estimates.
North Carolina Administrative Office of the Courts, “Civil Cases with a Home or Business Foreclosure
Filing.”
vii
North Carolina Justice Center analysis of North Carolina Administrative Office of the Courts data,
www.ncjustice.org/sites/default/files/Foreclosures%20Jan-March%2031%202011%20FINAL2.xls. The
Justice Center calculates the foreclosure rate on a per capita basis by dividing the number of foreclosures by
the total county population. This is a different methodology than the one used here. As a result, the Justice
Center’s rates are not directly comparable.
viii
2011 American Community Survey 5-Year Estimates, Table S2506. Although this is a simple and
straightforward way to calculate the foreclosure start rate, it is only an approximation. Since the number of
owner-occupied home mortgages in any given tract fluctuates over time, the number reported by the
American Community Survey may not be the number present in the tract at the time of the foreclosure
starts we examine. Additionally, the margin of error for the number of owner-occupied homes with a
mortgage is large for some tracts, possibly leading to skewed results.
ix
UNC$Center$on$Poverty,$Work$and$Opportunity