The Ripple Effect of Foreclosures

The ripple effect of foreclosures is telling all around. The city revenues have dropped, crime has increased and so too has homelessness. There are vacant properties everywhere according to a survey conducted by the local elected officials. Two thirds of the latter reported to the National League of Cities that since the previous year all the cities recorded sharp increases in foreclosures. The survey was conducted in the form a questionnaire online via e-mail. Drop in revenues and the problem of urban vacant units was reported by a third of the officials. More than a fifth of the respondents stressed on the rising number of homeless people who are in dire need for temporary shelters on an emergency basis. Their numbers have sharply increased since the previous year.

The drop in local government revenue collection comes at a time when more services are required bemoans Cynthia McCollum of the National League of Cities. She is also councilperson from Madison. She elucidated that people are stealing and criminal activity is increasing because of these foreclosures. But the city authorities do not have sufficient funds to put more cops on the roads and streets.

The members of the League are meeting congress lawmakers in Washington DC to discuss federal funding for local measures. Dominating the talks will the problems of foreclosures. James Mitchell, councilperson from Charlotte said that the great American dream of owning a house has become a nightmare of foreclosures for the cities and towns. Mitchell is also the head of the National Black Caucus of local elected officials. Vacant foreclosed houses attract crime and health problems. In the neighbourhood of Peachtree Hills as many as 115 of 123 houses are in foreclosure, said Mitchell. There are only 12 families left behind but they cannot sell their houses because the value of their houses has dipped to absurd low levels. “It’s starting to be a symbol of what we don’t to happen to Charlotte.”

Most of those who were lured into the pit of sub-prime mortgages were Afro-Americans, people coming from the lower and middle-income group, single parents, senior citizens and other minority groups.

One of the worst hit areas is Riverside in California. It is the heart of the Inland Empire. During the boom people rushed here to buy houses. Now the flow is reverse. Most of the boom was in the east where foreclosures are now dominating the scene.

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