Targeting foreclosure interventions: An analysis of neighborhood characteristics associated with high foreclosure rates in two Minnesota counties

This study examines the statistical association of foreclosure sales with social, economic, and housing variables to assess the feasibility of identifying high-foreclosure neighborhoods in advance, and explores the socioeconomic traits of these neighborhoods so as to design appropriate mitigation programs. Using data on 2002 foreclosure sales for Hennepin and Ramsey counties from the Minneapolis–St. Paul MSA, we find that several factors could have correctly identified, in advance, most high-foreclosure neighborhoods. We show that an accurate credit risk variable is among the best predictors of foreclosure and also critically affects our multivariate analysis of factors associated with foreclosure.