The Snowballing Effect Of Foreclosures

March 13th, 2008

The foreclosure game is not remaining confined within the playing courts of lenders and borrowers – it has spilled over the centre stage with a snowballing effect. With real estate markets at an all time low the tax revenues are suffering, empty houses have led to a rise in crime and an increase in vagrants prowling around.

Recently 211 local officials were surveyed online by the National League of Cities. About two thirds of them said that in their localities there has been a rise in number of foreclosures during the past year. A third said that revenue had dropped while there had been a rise in abandoned properties leading to crime. Cynthia McCollum, the president of the National League of Cities as well as councilwoman in Madison comments that while revenues have gone down the need for services have gone up. Foreclosures have led to stealing and vandalism. Money is required to put more cops on the street. More than a fifth of the interviewed officials said that during the past year there has been a sharp need for temporary emergency shelters. The monthly meeting of the League was dominated by the foreclosure issue. Washington is also focusing on the urgent task of getting federal funds for local endeavours.

A councilman from Charlotte, James Mitchell says that the American dream of owning houses has turned into a nightmare in the cities. He is the head of the National Black Caucus of Local Elected Officials. Vandals are honing in on foreclosed abandoned houses and the numbers of calls to the police have gone up. Peachtree Hills is one of the many localities where new houses had come up but today out of 123 houses 115 are in foreclosure, said Mitchell. Only a dozen residents are left because they cannot find proper buyers for their properties because of depreciation. Charlotte stands apart as a constant reminder to all that this should not be allowed to happen.

The majority of the owners were Afro-Americans who were lured in by nil down payments on houses that were apparently going cheap. The survey reads that most of those affected by foreclosures were families with modest income, single parents, senior citizens and coloured. Foreclosures are affecting even those cities that have so far been spared its intensity.

One of the worst hit regions is Riverside in California which had recently seen frenetic housing activity.