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EDITOR’S COMMENT: Mr. Yglesias starts off with a correct description of the tragedy of neighborhoods blighted with homes now sitting vacant and abused and he is correct by identifying this as a national disaster, but he completely misses the second and third, perhaps even larger, national disasters for potential home buyers looming on the horizon. It’s good to remember the consequences of massive foreclosures. And it is better to remember that most of these foreclosures are exercises in fraud upon those communities, the borrowers, investors, the Courts and the U.S. Treasury.
The second tragedy is that of a foreclosed home being purchased by a naive buyer anxious to “get a good deal”. A buyer who in today’s market is underwater as soon as he/she signs the paperwork. A buyer who is unable to purchase title insurance worth the paper it’s written on. A buyer who more than likely will never have clear title, or at least not without extensive research, time and legal expense and even then it’s just a possibility. A buyer who does not understand that he/she has become a willing pawn laughingly used by the pretender lenders, who are banking (pun intended) on his/her pursuit of that “good deal”, to step once again on the backs of the family they just foreclosed on. How much of a good deal is that?The third tragedy is slower to happen but is beginning. Homeowners are coming back for their homes. That means that the naive buyer described in the paragraph above, will now face, with shock and disbelief, a letter from a lawyer’s office, or perhaps a notice of a court hearing in which he/she will learn that the home that they rushed to get such a good deal on, is not theirs and never was and now they too will be evicted and/or face a long legal battle just like the family before them.Do you think there will be another buyer in line, anxious to “get a good deal” and repeat the experience? How many times do we need to hit the repeat button? Here’s an question to think about…What would happen if we all refused to participate in this game that Wall Street created? What would happen if no one ever again purchased a foreclosed home? What if every homeowner wrongfully foreclosed did come back for their home?
Mike Konczal’s wonky take on the “Occupy Homes” anti-foreclosure offshoot of the Occupy movement reminds me of the first thing I ever wrote about the Great Recession, back before I really understood that’s what I was writing about. I was on staff at The Atlantic in late 2007, and was headed to Miami for separate reasons and an editor there suggested that it would be good to get a piece reported from there on mass foreclosure neighborhoods. I cited a study noting that “every foreclosure reduces the value of all other houses within an eighth of a mile by about 1 percent, as the sight of vacant property scares off potential buyers.” At the time, however, we weren’t anticipating the kind of prolonged vacancies Konczal talks about here:
I don’t think we’ve heard enough from the neighbors of the abandoned homes that were reclaimed in these events. I talked with one of the neighbors of the house that was reclaimed in East New York as it was happening, and he told me that the house had sat vacant for a few years. Contractors doing nearby demolition work would come in the middle of the night and dump bags of garbage on the house’s front lawn because they knew it was empty. There would be broken sinks, glass, bricks and other garbage that couldn’t sit there, since there were many kids in the area. So the neighbors would have to get together and haul off the materials.
He also brought up that he’d have to shovel the snow in front of the place during the winter, since there were many older folks in the community as well, and the banks weren’t going to keep the sidewalks clear. He expressed concern that someone with a chemical dependency could set up shop in the house. As the neighbor put it, “what if at 1 or 2 in the morning the person’s drugs run out? They step outside, and maybe an older person is walking by themselves down the street. That could escalate into a bad situation.” Or maybe a fire started, which spread to the roofs of the other connected row houses? The Occupy crew that went in to clean the place found extensive black mold – the banks left the place to rot.
These kind of scenarios are of course familiar to those of us who’ve lived for years in urban neighborhoods spotted with vacant homes. Sometimes there’s nothing you can do about this. But it’s tragic and absurd to turn a home from inhabited to vacant against the wishes of its occupants. If a family loses a home and then the home gets sold to someone new, that’s a household-level tragedy. But if a family loses a home and then the home stands empty to rot, that’s a waste and a neighborhood tragedy. Having it happen all across the country is a disaster.
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