Land Values Plummet Due to Foreclosure
Take a Sunday drive through any suburban community across the country, and it will not be hard to spot many of the homes sitting in foreclosure. A wide majority of them are no longer occupied, and some have been unattended for many months. The grass may be unruly high and there may be boarded up windows, cracked siding, and some may have busted door locks. This may sound like the description of an inner city home in the poorest of American cities, but this is actually the scene in many suburban communities formerly accustomed to perfectly manicured lawns, flowerbeds, and proud home ownership.
The cause of these home abandonments is foreclosure, much of which was an inevitable result of lax lending practices over the past few years from many large banks and mortgage lenders. Many of these homes were purchased by adjustable rate loans which means the rates increase every year or two and could as much as double or more within the course of one year. Many people took these loans because it was their only option to buy their own home and others took them because they were led to believe they could easily refinance their homes before the payments became unmanageable. Since many of the homeowners who took such loans did not have good credit, refinancing later one wasn’t possible for many of them. For others, the current financial meltdown came before they had the chance to secure a loan to refinance.
Whatever the various reasons may be behind the epidemic of home foreclosures cities all over the country are now facing, neighbors of these foreclosed homes find themselves in a negative situation they have no control over. They suddenly have problems they cannot fix and they have no choice but to watch their formerly peaceful neighborhoods go downhill.
The least of problems for these neighbors is the eyesore that an abandoned foreclosed home can create. Left along for long periods of time without care, homes will deteriorate and many fall prey to thieves and others conducting criminal tasks. Neighbors may mow the grass for these homes occasionally, but they cannot help the boarded windows and broken locks.
The most unfair circumstance for those living near a rash of foreclosed homes is the drop in the land value for their own homes. When part of a neighborhood goes downhill and houses start to fall apart, all the surrounding property loses value as well. There is nothing these other homeowners can do but watch in desperation.
Hope sometimes comes in the form of home investors, who buy these foreclosed houses, fix them back up, and attempt to sell them for a profit. Foreclosure auctions are more crowded than ever before as more people become interested in possibly “flipping” houses to make a quick buck in the current flurry of home mortgages. Whether they will be able to sell the homes in this economy or not, they are welcomed by neighbors.
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I read a book called “Mortgage Meltdown” and it really helped me understand that I’m not the only one going through this. I was also able to apply for a grant from a non-profit to help me with my mortgage. I think anyone who is trying to save his or her home, like me, should read this. Go to http://www.48grant.com