Posted: 11/18/2007 8:04:43 AM EDT
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AP Centerpiece: Neighborhoods suffer as crime follows foreclosure By J.W. ELPHINSTONE AP Business Writer Article Launched: 11/13/2007 06:43:44 PM PST Eighty-five bungalows dot the cul-de-sac that joins West Ontario Avenue and East Ontario Avenue in Atlanta. Twenty-two are vacant, victims of mortgage fraud and foreclosure. Now house fires, prostitution, vandals and burglaries terrorize the residents left in this historic neighborhood called Westview Village. "It's created a safety hazard. And if we have to sell our house tomorrow, we're out of luck," said resident Scott Smith. "Real estate agents say to me 'We're not redlining you, but I tell my clients to think twice about buying here.'" As defaults surge on mortgages made to borrowers with spotty credit and adjustable-rate loans, more people are noticing that their neighbors are caught up in the meltdown. Their misfortunes are haunting those left living on the same streets. The effects aren't confined to just low-income or redeveloping communities. They also are seeping into middle-class neighborhoods and brand new developments. California's Central Valley has been hit particularly hard. Thousands of homes were snapped up by San Francisco Bay area speculators who hoped to flip their homes and turn a quick profit. They were caught short when the housing market turned. Many investors and other buyers are now trapped by falling home values and adjustable rate mortgages that are resetting to higher rates. Some speculators have tried to rent their properties. Others simply walked away from the homes they bought just a year -------------------------------------------------------------------------------- Advertisement -------------------------------------------------------------------------------- or two earlier. In many cases, the purchases were made with no money down. California ranks second for the rate of foreclosures, with one filing for every 88 households, according to RealtyTrac Inc., which monitors foreclosures. Nevada is the worst, with one for every 61 households, while the nationwide rate is one foreclosure filing for every 196 households. In Atlanta, Smith, the vice president of Westview Community Organization Inc., keeps a map of his neighborhood, tracking each vacant property and notifying local officials when nefarious activity is suspected. Georgia has the eighth largest foreclosure rate in the nation, one filing for every 142 households. "They've seen a lot of prostitution in the area, vagrants wandering in and out of the empty houses and drug activity," said Officer Dakarta Richardson of the Atlanta Police Department. "Some people that I talked to are afraid to walk out of their homes at night." Some other people in the area have been affected by break-ins, and there have been house fires in several of the vacant homes in the past year, Richardson said. The rise in crime in Westview is typical of a neighborhood struggling with numerous foreclosures, according to a recent study by Dan Immergluck of Georgia Institute of Technology in Atlanta and Geoff Smith of Woodstock Institute in Chicago. That study showed that when the foreclosure rate increases 1 percentage point, neighborhood violent crime rises 2.3 percent. "The key here is the concentration of those foreclosures at a neighborhood level. When you have more than one foreclosure in a few block area, that's when you start to think about the effects on property values and the effects on crime," Immergluck said. A report published Tuesday by the Center for Responsible Lending, a Durham, N.C.-based consumer advocate, estimates that 44.5 million U.S. households will see their property values decline a combined $223 billion as foreclosures surge in coming years, particularly in minority communities. Historically, the most affected areas were lower-income and were prone to subprime and predatory lending, irresponsible house flipping and mortgage fraud, Immergluck said. However, "the problem now is on a different scale," he said. "It's affecting a lot more suburban, moderate-income places" as more people of different incomes default on riskier loans. In the Franklin Reserve neighborhood of Elk Grove, a suburb south of Sacramento, homeowners are fighting inner-city problems such as gangs, drugs, theft and graffiti. During the boom, the suburb sprouted 10,000 homes in four years, attracting investors from the San Francisco area. Now many houses stand empty, weeds overtaking lawns, signs lining the street: "Bank Repo," "For Rent," "No trespassing—bank owned property." A typical home's value has dropped from about $570,000 to the low $400,000s. The homeowners sometimes have no options but to accept any renters they can get, said Norm Schriever, a local real estate and loan agent. "You get some bad renters in there and the weeds start growing and a few windows are broken and it starts descending into a feeling of chaos," he said. Thieves also have looted some empty homes, stripping them of electrical appliances or valuable copper wiring and pipes that can be sold as scrap, he said. Banks aren't watching foreclosed properties closely, said Modesto, Calif., Police Chief Roy Wasden, who is monitoring the housing decline as chairman for the California Police Chiefs Association's Marijuana Dispensary Task Force. Modesto police recently discovered about 100 marijuana plants growing in the backyard of one vacant house. That led them to about 500 plants growing inside an occupied home. "As it gets colder, (squatters) will start building fires in these structures and it's quite dangerous," he said. Franklin Reserve resident Susan McDonald said two of the homes on her block were turned into indoor marijuana farms. Both caught fire last summer after the pot growers tapped into the city's electric grid with faulty wiring. But McDonald, who has lived in the community for three years and is president of the residents' association, jokes that they make better neighbors than some. "The pot growers, they mow their lawns, they take out their garbage," said McDonald, an executive at a local bank. "There's been gang activity. Things have really been changing the last few years." Crime reports in Franklin Reserve rose 45 percent in May, to 100 from 69 in the same month last year, but record-keeping changed when Elk Grove created its own police force in August 2006, said Officer Chris Trim, spokesman for the Elk Grove Police Department To deter crime, the community policing unit is charged with working with code enforcement officers on problems such as unkempt homes. Patrol officers swing past vacant homes as part of their normal duties, but there has been no increase in the police budget, overtime or staff as a result of the empty homes. Meanwhile, neighbors are doing what they can. One Sunday last month, two dozen church members gathered their lawn mowers and weed trimmers and cleaned up 27 vacant homes. "We had weeds that were almost eye-level high," said Steve Steele, pastor of the Tree of Life Community Church. "If no one was home, we just kind of did it good Samaritan style." Modesto police chief Wasden said inland California areas seem harder hit than coastal cities, where more expensive neighborhoods have generally held more of their value. But the problem is widespread for residents who took out large home equity loans or bought with subprime mortgages and are now trapped by the lower home values, said law enforcement officials and real estate experts. "Everyone in the United States is looking at the Inland Empire (the region east of Los Angeles), where a lot of homes have gone into foreclosure or may soon," said Linda Adams, a lawyer in the Riverside County community of Murrieta whose firm represents 1,500 homeowner associations in Southern California. "It isn't just the inexpensive homes. It's really expensive neighborhoods, as well." In Shaker Heights near Cleveland, neighbors of a planned community of $1 million Tudor homes can report a foreclosed or vacant house, and the address goes on a police watch list. Of 13,000 housing units in Shaker Heights, 330 are under surveillance by patrol cars and undercover officers, police Chief Walter Ugrinic said. RealtyTrac reported that Ohio is fifth in the nation with one foreclosure filing for every 107 households. The city repairs vacant homes if recalcitrant owners won't, bills the owner and, if unpaid, a lien is filed. So far this year, the city has spent $800,000 to fix 44 properties, up from $500,000 in 2006. Typical repairs include fixing roofs and painting, with an emphasis on problems visible from the street. Additionally, before a house is sold, it must pass a housing inspection, which includes a repair-cost escrow requirement created in 2000. This encourages owners of vacant or foreclosed properties to make repairs, said Kamla Lewis, director of neighborhood revitalization. "Our goal is that when you drive through, you shouldn't be able to tell right away which of the houses are vacant and foreclosed," Lewis said. ——— |
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I see a lot of people here respond with "Ha F-em!" to the idiots who got those variable interest mortgages that they could not afford. I don't have any sympathy for them, but having huge tracts of uninhabited houses causes a lot of problems in a community. I heard there are tons of empty houses around Vegas that speculators from Ca bought. One realtor said that even though a lot of these homes were never lived in there were still people moving into the area from CA who were building new houses because "they didn't want a used house.' |
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Honestly, I don't have sympathy for the buyers, or the lenders who gave them the money to buy the houses in the 1st place. If we bail out the lenders, then what is the motivation for them either get rid of the risky home loans, or be more strict on who they lend to? Also, it would correct the out of control home prices and bring them back to a reasonable level. When the average joe who makes average wage can't afford the house prices, then we as a nation have a problem. |
I have no sympathy for stupidity. But the loans have ruined this place. I HATE Atlanta now. I was born here. This place continues to get worse by the day. We moved out to the west side when it was trees to get away from the crap now the developers have brought the crap to us. The really shitty part is our house is paid for and now we watch as the area around us turns into ghetto. I just hope it holds up until we get our land and get our retirement home built. Sure we could afford to move farther out and up BUT If we move to a more expensive area and give up our savings, our plans for the future get put on hold that much longer.  |
I screwed up.. was trying to highlight a quote in the first few sentences.. Anyhow... someone please explain the "mortgage fraud" bit to me??? |
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Government(Democrats) don't want to bail out the lenders as they are big business, but they definitely want to bail out the little people(the borrowers). Government money will be used. The productive people of this country will have to pay for the non productive which will just make the overall situation worse.
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You have fallen for the lie.... D/R makes no matter The lenders will win at expense of the taxpayer |
No, not the lenders. The lenders WON. They sold the mortgages on the market and a lot were picked up by European and Chinese speculators. The greedy lenders made their money and will be keeping it. We taxpayers will be the losers when we bail out the market to keep the dollar afloat so as to keep investors happy. However, I agree with Arfcom and also say phuck 'em. Let it go. Why should we pay anything? |
And America makes one more lap around the toilet bowl................... 
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It is when a, "fly-by night" loan company, offers a person a loan, where some of the terms of the loan are hidden, or not fully disclosed. All the company wants is the upfront money and doesn't care about servicing the loan. They will sell the loan to another bank with 30 days. They know the person will default, they cook the forms to make sure they get approved. To anyone who says, "that's their fault for not reading or understanding it".. I'll put it this way...If I told you, "I will pay you $2000 to ram your car into a brick wall, then allow me to bill your insurance company" Who would you blame for the Countries Insurance rate increases? Its not just the consumers fault guys. |
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I am sure a few remember the hundreds of tract housing sitting empty 20 odd years ago.. I know there was a subdivision in dallas where maybe 3 or 4 families were still living out of 90 homes... saw pictures of an entire sub in Utah I beleive,,.totally empty most repos,,some spec homes built or being built... this go around could be way worse than the RTC debacle in the 80's\ I do beleive we are over due for a major recession..the way the dollar is dropping etc... reminecent of germany pre WWII |
No they are victims, as well as dopes. As the post above your states, in the 80s this happened as well...the main difference now is Corporate greed overrode Lending Ethics. We now have major banking institutions crumbling due to their own unethical practices, this in turn causes more problems in sociaty..mainly criminal behavior gaining a foothold in otherwise crime free areas. I have no problem telling you all I was part of the problem 20+ years ago. I wanted a home and the un-ethical Leander / Broker, I went to doctored my credit report and earning potential to allow me to qualify for a home. The Banking Institutions realized this was happening all across the county and went to congress to have the laws changed to stop this, BEFORE it became a national problem. In my younger years I didnt realize the errors in my ways, and thought..everybody does it so it must be ok... fast-forward to the present....Those same types of un-ethical practices were being used again, but this time Corp Greed allowed it to go too far. I wised up quickly back then, before this situation ruined me. The number of people who wised up this time around was a lot lower, so now we are all in trouble. |
You know what you make, so you know what you can afford to spend on housing. When it comes to the price of the house, it is up to the buyer to conduct their "due diligence" on the market then plan on investing in. This means taxes, comps, appreciation/depreciation, schools, etc. Why is this concept so hard to understand? |
Exactly! The concept of personal responsibility is so seldom exercised some people have apparently forgotten what it is. My heart doesn't bleed for the stupid, greedy, ignorant douches who bought the majority of those homes. They were looking to make a quick buck, I know many many people personally who were bragging every day about how much their house value had gone up. People were taking HELOCs out to pay for stupid shit like new cars and boats, thinking the market would never go down again. They are now getting exactly what they deserve. I know there were unethical lenders out there, giving loans to people on "stated income" and BS like that, but the responsibility lies with the person who signed their name to the contract, nobody else. The whole concept of "zero down" mortgages is flawed, unless it's done through the VA. If you have to have the discipline to save up 10-20% of the cost of your mortgage, and then invest your hard earned/saved money, you are more likely to read the contract carefully and actually make your payments to protect your considerable personal investment. In a zero down situation it's way too easy to just walk away, all you do is ruin your credit. |
Yea but I heard a lot of criminals are getting bigger newer houses out in the suburbs now. ;) -------
Politicians always want to SOUND like they are doing something, but they're stuck. If the gov't prints enough money to save the US housing market, the foreign exchange rate for the US dollar will go down the toilet. They can't save both, and may not be able to save either. ~ |
I think you both have lost sight of the issue. If I give you a gun and tell you to rob a bank, I am just as guilty as you...AM I NOT? So many people want to ignore the true problem and simply "blame the person". You say short sighted things like, "The concept of personal responsibility is so seldom exercised some people have apparently forgotten what it is." As if the person who organized the crime is not as guilty as the person who did it? I am sorry here you are both wrong. The person who signed the loan is guilty of being stupid, greedy, and a moron...sure. But the blame doesn't stop there. There was (and still is) an industry with a business plan that involves fraud as its way to the main goal of making money. They are the real problem here. The main point to the OP was crime moving into the areas of foreclosures. Yes this will happen because as the homes foreclose, criminals will use them as short term places to operate from. |
There have always been "predatory lenders" and still are, by the tens of thousands. What do you think a Pawn Shop or "Payday Loan" place does? They prey on stupid, desperate people who make bad financial decisions every time they walk through the door. It's still not illegal, or in my mind even unethical. People are free to be as greedy, selfish, and stupid as they wish with their own personal finances, I don't really care what the lending industry was doing to encourage such stupidity. Trying to make the suckers that bought at the bottom of the great housing pyramid scheme look like victims doesn't fly with me though, they made the decision to play the game, and many got burned. Cry me a river. |
Bullshit. I live here. Crime is everywhere... from the highways to the suburbs. I bet you're statistically more likely to die in a Wafflehouse robbery than in a hospital of natural causes. This city is going to shit and it has spread 30 miles out to where I am. You gotta keep moving to get away from it. There are people commuting over an hour each way to get away from the socialist paradise that is Fulton/Cobb/DeKalb. And screw these losers that default on their mortages. Shoulda read the contract. |
Hold on here man...I think you maybe suffering from.."I heard it on the news, but didn't listen syndrome"....This problem was not caused by stupid people taking out loans they couldn't repay...this shit was caused by FRAUD and greed.. Unlike in the past when a couple thousand people got too big of loans, now The three parties got together to commit fraud in order to make money. The fraud was committed by the Brokers, the Banks and the consumer...Just blaming 1 of the 3 is a simpletons way of thinking about this. Brokers... 1)told people to how to alter the docs to get a better rate. 2)hid and created docs. 3) adjusted numbers to make a profit Banks... 1)overrode lending requirements to cook their stocks by making it appear they had less risky investments. 2)told brokers what needed "to get lost" in order to write the loans. 3)instead of monitoring what the brokers and underwriters were doing, gave them complete control over loan approvals, (seems just stupid and not fraud right...wrong..they knew fraud was being committed and that's why the turned the other way) Consumers.. 1)Did what ever they could in hopes of "flipping" the home for fast cash, only to be stuck with a loan. 2) didnt read the loan docs. 3)didnt understand the loan docs. 4)only wanted a house and didnt realize the total cost of owning. I can't understand why people will read a few lines in the paper and think they understand the whole story... Guys I need cash, I'll give you the guns and masks..All I want is 10% of what you steal...By the way you guys think thats completely legal...LOL Now what the Brokers, Banks and consumers did wasnt illegal..it was unethical and poor business practices...and we all pay that bill. |