The purpose of this study was to develop a conceptual model that could be used to aid in identifying which household factors contribute to an increased likelihood of foreclosure. More specifically, what borrower-related and mortgage-related factors are correlated with home foreclosure? This was achieved by studying a sample from an inventory of active and foreclosed Federal Housing Administration (FHA) homes in the state of Utah. The sample consisted of 179 cases. Characteristics of interest were extracted from data and divided into two categories: borrower-related factors and mortgage-related factors.
Bivariate, and multivariate analyses were conducted with the borrower- and mortgage-related factors. Among the major findings was the significance of race, front-end ratio, and interest rate in the likelihood of foreclosure. Similarly non- White borrowers were found as a concern group. Lastly, the presence of a first-time homebuyer and a high front-end ratio need to be viewed as potential factors leading to foreclosure
