Community Response To Tackle Foreclosure Problem In Indiana

October 2nd, 2007

Indiana is one of the worst hit by the foreclosures. The numbers have grown unabated from 2002 and continue to do so. The largest concentrations are in Central Indiana and in urban centers like Gary, South Bend and Fort Wayne. Marion and the counties around practically drowned under the lashing waves.

Foreclosures are concentrated in localities where income levels are lowest. In these regions the people spend a disproportionate amount of their income on housing. But this is not the whole truth – foreclosures are not unknown in rich localities. Surplus houses also lead to foreclosures.

US Department of Housing and Urban Development has made an all out effort to build houses in Central Indiana. Most of the units built after 1990 were owned by HUD and not by banks. In regions where there were a large number of foreclosure homes the chances of selling a listed property were less. The houses were sold for low prices since the appreciation rate was sluggish and on the negative side.

These areas are dotted with deserted houses. It is not absolutely correct to link foreclosures with the demographic colour of the locality but the possibility cannot be completely ruled out when dealing with solutions. Foreclosure is not just a legal term – it is associated with emotional trauma for the owners who are struggling with empty pockets. The virus is not isolated – it affects the lenders as well as the entire vicinity.

The Center for Urban Policy and the Environment has been conducting statistical surveys about how much foreclosures has affected value of housing in Marion County. According to it the units are sold at 26% to 29% less than properties which are not foreclosed properties. But in areas where foreclosures are concentrated it has a negative effect on the price of other houses. On an average the entire neighbourhood suffered a 4% slump in prices thanks to foreclosures. The total fall in stock prices of properties right across Marion County was calculated to be 9%.

The findings point to the need of a collective action since all are affected – directly or indirectly. Counselling programmes are the need of the hour coupled with cash help. With more foreclosures being apprehended it is not too early to form a framework of rescue keeping in view these twin objectives of advice and funds. The community must be proactive to survive and live.