Punishing Foreclosure Victims--Some Banks Take One Last Shot
I see opportunity here. Since every person and business in this great Country is rethinking and learning new / innovative methods of personal and business practices, one wonders how we (everyone BUT the Bankers) can legally and quickly wrest these properties away from languishing in the abandoned state.
The longer these homes are empty, the deeper a community destabilizes. The negative social and emotional impact to the remaining neighbors is clear, but have we considered how this experience is translated through the eyes and soul of a child?
The logical answer is for a City or GSE to take possession and convert to low income or assisted style housing. At least that is the old paradigm. Not certain that this would be economically feasible, even in Denver, where we are recovering nicely, but still have over a $100M shortfall in our City budget.
However, like the 1960's style of Urban "Renewal", I feel the methods of the GSE's and Low Income Service Providers need (desperately) to change their business models - or perish. We are smarter and faster now. Business Plans need to change.
It's not the "poor" that need help these days - it's more like 98% of us! Could the States, Cities, etc. devise a method of taking possession of these abandoned properties and charging Churches and Neighborhood Organizations with the responsibility of rehabilitating then leasing these houses?
There are other ideas that - at a grass roots level - make a lot of sense. Most of us are on a tight personal budget now also, but I can afford time and a few dollars to help keep my community stable.
I live in a neighborhood of about 1400 houses. I think that, somehow, we could each afford $10 each per year. Place that in a fund to manage a few abandoned properties that the City grants us (The RNO) ownership to and we have the means to lease and maintain the properties to some of our neighbors who lost their homes to foreclosure. Keep their kids in the same school and keep the community more intact.
This idea - in its' simplest form, can provide cash flow to the RNO or Church who becomes the landlord and can provide a few jobs (property management and maintenance) in the community. It will also place revenue in the local banks. As the neighborhood stabilizes and people are able to purchase homes, these properties can be sold off or continued to be used as a locally managed asset for the Church or RNO.
Spread the work; spread the wealth again, this time from the bottom up.
There's always the opportunity to reactivate the Homestead laws...
Food for thought - any otehr creative ideas out there?
Penelope Zeller, Denver Colorado
In an article today in the Milwaukee Journal Sentinel, it was reported that it’s becoming commonplace for lenders to refuse to take title to some properties following foreclosure. Why would a bank bother to foreclose and then abandon the property? It’s simple economics. Many of the homes just aren’t worth the bank’s efforts. But then, why would they foreclose? And who ultimately owns such properties? The answers are often as confusing an illogical as the creation of the subprime collapse that precipitated the problem.
What’s happening is a crime—perhaps not legally, but figuratively. Sometimes it’s a crime against the very people who have already suffered the most; and other times it’s a crime against neighborhoods trying to recover from issues of high crime and drug dealing. In the words of Catherine Doyle, attorney with the Milwaukee Legal Aid Society, “This is just the meanest and nastiest thing (lenders) could do. Even more profound is the terrible damage to the community.”
Abandoned homes become a blight on neighborhoods, havens for drug and criminal activity, and create fire and safety hazards. No longer sources of tax revenue, such homes are a drain on struggling cities resources, and ultimately cost taxpayers thousands more when ondemned and bulldozed.
The procedure, known in the trade as “walkaways,” is a growing problem, especially for cities, where most are pressed for revenue. The mortgages on these homes, the great majority of which are subprime, were often made by now-defunct mortgage brokers, and are being foreclosed upon by loan servicers on behalf of investor groups often thousands of miles away. And, unfortunately, there appears to be no solution to the problem.
Have banks lost their hearts, or is it they never had one? The image of the friendly neighborhood banker was perhaps always a utopian vision; but what they’re doing is egregious on a monumental scale. Throwing people out of their homes, only to have those homes bulldozed later, is not only inhumane, it’s sheer stupidity. Once the owner is forced out, the home falls in to disrepair, may be vandalized, and everyone loses. And, the irony is; when the bank walks away, the original owner is still on the hook for taxes, boarding-up and clean-up fees that can run into the thousands of dollars. It’s a game of no winners.
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