Foreclosures Affect Neighbors

by John O'Leary

As per the following post, if you have a neighbor who falls behind on their mortgage payments and the bank forecloses on them, it can have a negative affect on the property value of your home.

Foreclosures Reshape Neighborhoods
Neighborhoods riddled with foreclosures quickly develop other kinds of problems.

In fact, one foreclosure will shave up to 1.5 percent off the value of the other homes on the same block, according to research by Dan Immergluck, associate professor of city and regional planning at Georgia Institute of Technology.

Other costs are harder to measure, but municipal governments, police departments, and neighbors observe that empty homes give rise to an increase in thefts and may encourage drug dealers and even violent criminals to take advantage of the situation.

As homes fall into foreclosure, a neighborhood frequently turns more transient, analysts say. Investors often buy homes in foreclosure and rent them out if they can't sell them.

"You end up with a very fragmented community," says home owner Ann Fulman of Atlanta. "When investors buy them and turn them into rental property … folks come in [who] don't have the means to keep up the place."

In the Atlanta suburbs of Gwinnett County, the police department recently created a Quality of Life unit to address problems often associated with foreclosures. Working with other government agencies, the unit targets such issues as building-code enforcement, vagrancy, and graffiti.

Source: USA Today, Noelle Knox (04/13/07)

Comments

[Jason Ganz]

Great post! I am gonna share it with my own blog readers at jason.landbrokr.com ! Thanks.

[John]

Late payments can and do affect your credit, but nothing hurts your credit worse than "mortgage lates". If you possibly can you want to pay your mortgage payments on time and in full. If this becomes impossible for you to do it's time to do something serious in order to preserve your credit. At some point saving your home may not be the primary concern. Remember, it's just a house and you can always get another house, but if you damage your credit you may not be able to do that. So make sure you have your priorities in order.
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