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Foreclosure Neglect Creates Challenges for Cities

With the rise in foreclosed homes, maintenance is becoming more and more of an issue.  Some homeowners are neglecting their properties, and others are even intentionally damaging their homes because they are in jeopardy of foreclosure.  Banks also are largely responsible for property neglect, and the issue is becoming more apparent throughout the country.

Joe Caione, who works for Smith Property Management LLC, noted how the company has been dealing with many homes that are in bad shape.  “We’ve had homes where they stopped up the drains, turned the
faucets on and left,” he said.  There’s a lot of emotion.  If you lose your house, you won’t be happy.”

Banks are also at fault, though.  CNN reported that U.S. Bank failed to maintain more than 170 foreclosed properties in the Los Angeles area.  Communities are suffering as neglected homes lead to increased drug problems and crime rates.  Property values in the area decrease, and therefore neighborhood quality tends to deteriorate as well. This trend in housing neglect is hurting sales of the foreclosed homes.  Caione noted how “if you are looking to buy this house, and you drive up and see it covered in ivy 5 feet deep, you’ll get back in your car and drive away.”  Similarly, if a buyer sees an unkempt home in a neighborhood with crime, they’ll probably move on.

A spokesperson for U.S. Bank argued in defense that it is the mortgage servicer that is responsible for maintenance, and the bank is just the trustee.  A Los Angeles city attorney pointed out that trustees are required to take action when servicers of foreclosed properties fail to maintain them.  The complexity of real estate nowadays stems from the relationship between the owner of a mortgage loan, the servicer and the trustee.  Since these can all be a different person or company, relations and communication between them are vital to the upkeep of a foreclosed home.

The city of Milwaukee, however, is taking a new perspective on foreclosed homes in their area.  As a way to combat foreclosures, they have proposed to call for people who are unemployed or facing foreclosure to create urban homesteads.  These people would be “given access to foreclosed homes and vacant lots plus the resources to grow their own food there, as well as food for others.”

If participants successfully maintain the homestead for five years, they keep the property. The mayor of Milwaukee, Tom Barret, explained their idea “empowers people to transform foreclosed properties into community assets that improve public health and nutritional outcomes, revitalize neighborhoods and spark innovative economic opportunity.” 

Paige Taylor is a creative writer from Michigan. She works closely with drug rehab programs helping people struggling with addiction.

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