If you are one of the 93% of Americans making their house payments on time, you may not think the foreclosures of the other 7% will affect you. Unfortunately foreclosures affect everyone. When comparing January 2008 to January 2009, foreclosures were up by 57%. That’s a large number and foreclosures are becoming a large problem.
- When a bank or other entity forecloses on a home and then sells it for below market values just to get rid of it, that affects all homeowners in the area. It is not uncommon for a bank to lose $60,000 on a $200,000 foreclosure when you add up all of their costs.
- It is difficult for banks to absorb all of these losses so they become even more conservative with all of their lending, not just home loans.
- This also creates challenges for the Mat Su Borough because real estate taxes are not being paid, or not being paid on time. This makes it a challenge for the borough to continue to fund fireman, policeman, schools and basic services like snow removal.
- There have been several studies that link an increase in crime to neighborhoods where there are more foreclosures and vacant homes.
No one wins through foreclosure. Families are stressed through the process, local governments struggle to keep up with services and other home owners values are affected. The more we can do to help folks avoid foreclosure the better. If you know of someone that is behind on their payments and doesn’t know what to do, have them contact me or review this information on line to see options they may not know about.