Tough New Ideas Needed To Tackle Foreclosures

Posted on July 1, 2008
Filed Under Repo Homes |

The call of the hours is tough new ideas to tackle the surging tide of foreclosures. So far the measures taken have been on a low key. As the crisis further intensifies more and more abandoned derelict houses are dotting the country right across America like ugly pock marks.

Last week Barbara Grady reported in the Oakland Tribune that Oakland’s ground zero is a one and a half mile stretch lying across 73rd and 90th Avenues spreading on to International and McArthur Boulevards. Squeezed in here are 150 units including houses as well as apartments all in the foreclosure net. In some blocks there are more than 3 foreclosures.

Apart from being a stain on the locality with overgrown yards and littered mail crowding front steps, these houses attract criminal activity and create health hazards. Mosquitoes breed in stagnant pools and there have been reports of snakes creeping in chasing jumping frogs. Mice multiply. The greatest harm of all is done to the valuation of adjoining houses that keeps getting dragged down by the foreclosed units.

How USA reached this point of no return is now an old story and known to all. Risky mortgages were doled out during the peak of the housing activity. Many had low interest only conditions for a specified period. Loan was sanctioned without verifying income levels. There was a feeling of complacency that real estate prices would continue to rise and the loan would be easily paid off with profits netted in. But the opposite happened. When the honeymoon period of low interest expired the borrowers found themselves loaded with double or even treble monthly commitments. Simultaneously the value of houses began to plummet. The equity vanished. In fact the loan amount came to be greater than the worth of the house. It made refinancing or selling impossible.

Since the house was not worth struggling for, thousands just walked away leaving the lenders weighed down by a heavy number of repo houses. The poor in the urban areas were the worst hit. Their attempt to better their condition had ended in a farce.

One such spot is East Oakland already in the doldrums with crime, poverty and drug problems. This has been the scene here since the 1980’s. Foreclosures have worsened it. Fed up with this some residents have come forward to address the problem with the help of ACORN.