Foreclosures Costly for Neighborhoods & Communities

You might think that a foreclosure or short sale of a home in your

neighborhood doesn’t affect you.  It is a shame for those people but what

does it have to do with you?  Plenty, it turns out, if you plan on moving

in the next few years.  According to the U.S. government’s website about

the National Mortgage Settlement with major banks, it can affect your

bottom line tremendously.

When a house is subject to foreclosure, it creates a ripple effect

that lowers the value of nearby single-family homes and other properties.

  In 2009 the Center for Responsible Lending projected that homeowners

living near foreclosed properties, on average, would lose $7,200 in property

value, and projected a four-year increase in losses to $20,300 per household.

No one who owns a home is safe from this reversal of real estate values.

We have seen this play out in wealthy suburbia and lower priced homes, where

it hits financially vulnerable households.  Homes that were selling for $100,000

a  few years ago are now priced at $80,000 – $60,000, or considerably less. 

We have heard that investors are being offered homes grouped in tens in some

areas, that  are  priced below $10,000 each.  The effect on neighborhoods is

sobering.  In fact, it traps homeowners in homes that they can’t sell.  Their only

options are short sales or foreclosure to get out from under their mortgage on

a home that isn’t worth what they are paying for it.

Because we have been watching this train wreck in our local neighborhoods

for awhile now, we are optimistically awaiting the outcome of the National Mortgage

Settlement. ( see link above)  This could bring financial relief to millions of homeowners

by lowering their monthly payments.  Many Michigan households that teeter on

the edge of a financial precipice are waiting for relief……….Will they get it?

________________________________________________________________________________

The authors of the this blog write about Grand Rapids Real Estate,

the Greater Grand Rapids MI area, and what it is like to live in

West Michigan.  We believe: Grand Rapids is a Great Place to Live!

Westbrook Realty Grand Rapids MI Real Estate

                          Contact Terry   616-292-7263

OUR FLICKR PHOTOSTREAM