"Thank God that's not MY problem," is often one's reaction upon hearing that someone in the neighborhood has been foreclosed.
Please take this to heart: as a homeowner, it really IS your problem. Foreclosures are an equal opportunity occurance. They don't just happen in middle and lower middle class neighborhoods.
Driving home from church yesterday, I passed through a Tucson neighborhood where older homes on two acres list for as much as $750,000. The graffiti stopped me cold.
I pulled over and took the picture you see below.
Being foreclosed--betting the farm and losing the bet--takes an extraordinary toll on individuals, couples and families. In the wake of a foreclosure, you'll see a spike in the following:
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- Substance abuse
- Domestic violence
- Arrests
- Open hostility in the workplace and neighborhood
- Divorce
- Child abuse
- Arson
- Teenage suicide (because of social embarrassment)
- Illegal use of property
You can see that some of these occurances impact the neighborhood directly. The home itself can become a danger to the comunity. When I summered as a kid on the eastern shore of Virginia, my cousins and I made an abandoned home our "hideout." My grandparents never knew. What if that were today, and one of us were hurt? Insurance policies, even if paid up, usually contain language denying coverage on vacant homes.
If an empty house near where you live becomes a magnet for undesirable activities, will you feel safe walking past? Will you let your children or grandchildren go near "that" house? Will the neighborhood develop it's own reputation, such that values begin to deteriorate because demand falls off?
There are other dangers. I remember a case of arson, where two seemingly law-abiding members of the community took it upon themselves to torch a house that had been neglected, seemingly abandoned, and certainly had become a blight on the neighborhood. It went from arson to murder, because the elderly widower who allowed the yard to go to seed after his companion's death actually still lived there. He became a hermit. No one thought anyone was in the house.
Don't let the "mortgage meltdown," the "credit crunch," and talk of "how many foreclosures will actually cause the economy to slip into recession," numb you to the ways in which one particular forclosure might directly affect you, your neighbors and your neighborhood.
As an individual, and particularly as a real estate professional, what can you do? Here are a few things:
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Talk to your neighbors. Ask how they're doing.
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If a property seems to have been abandoned, get a few neighbors, and take turns shoveling the snow, sweeping the front porch, and making the property appear to be cared for.
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Don't assume that it's an REO, and that the lender will do these things. The bank may be a thousand miles away. It isn't a part of your neighborhood.
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Be nosy. Ask at the barber shop, or the beauty shop. "What's going on with such and such an address?"
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Clean off the graffiti. Call the cops. Get involved. It's in your best interest to keep the rotten apples out of your particular barrel.
I'm Mike in Tucson, your preferred Tucson, AZ mortgage lender.
