Blighted Foreclosed Homes Push Lenders for Action
Foreclosed homes have been growing in numbers for the past month due to several issues related to subprime lending and the current financial crisis sweeping across the nation. This resulted to several vacant homes in city neighborhoods that are slowly deteriorating away due to blight.
Most of these foreclosed homes have unkempt lawns, broken or missing windows, damaged roofs and a backyard full of trash. Vandals and thieves have broken in, ripping out wirings from the walls and dismantling pipes.
This scenario has placed much concern to city officials as these vacant foreclosed homes are fast becoming havens for crime, drug addiction and prostitution. Homeowners remaining in these neighborhoods are also worried about these repossessed houses as their presence have brought home market values down way too low.
The problem would continue to worsen, as the initial estimate of 2 million from last year has now grown to 7 million homes in danger or in the process of foreclosures.
In Kansas City, a meeting was held between city officials, mortgage trustees and servicers in an attempt to putting a system in place to monitor and maintain these foreclosed properties. Large banks who own most of the reverted mortgages also attended and provided their assurance to the city officials and community members that they will work closely with the city in providing support in dealing with these properties. The banks and loan servicers have also committed to improve communication by providing contact persons and information as well as a monthly report on listings.
The meeting was a good start in facing this problem head-on. With the weakening of the economy and the expectation of mortgages to reset to higher rates, more families are expected to become delinquent in their mortgage payments. Aggravated by an increase in unemployment, these delinquencies will eventually translate to defaults and then foreclosures.
