Alstry Does It Again.....This is just madness!!!!!!!
July 12, 2009
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A while back, Alstry predicted that when enough homes in an area were foreclosed and/or enough local jobs were lost, the remaining homes in the area would be worth less than zero.....paying property taxes, maintenance, insurance and utilities would be more than the house was worth.
At the time, as is common with many of Alstry fantastic prognostications, ridicule and skepticism were the order of the day.....but in the end, we all know the amazing accuracy of Alstrynomics.
And here we go again with a hat tip to Calculated Risk:
http://www.calculatedriskblog.com/2009/07/lenders-walking-away.html
Rodney Lass figured his days as a homeowner were over when he was hit with a foreclosure judgment more than a year ago.
He stopped rehabbing his two-story Bay View home and moved on.
But what Lass didn't realize until recently is that the house remains in his name today.
He's still responsible for the taxes, upkeep of the property and the mortgage, leaving Lass perplexed.
"Why would I pay for something that I don't own anymore?" Lass said.
The foreclosure, however, failed to go through after the California-based lender decided it didn't want the gutted house. Lass said he found out for certain that he still owned it from the Journal Sentinel.
Today, the house at 703 E. Lincoln Ave. sits condemned, holes in its roof, a blight on the working-class neighborhood.
The home represents a growing phenomenon known as walkaways - properties for which lenders sue for foreclosure but never take the title.
City officials, lawyers and community activists say they've seen an increase in lender walkaways, although they can't estimate how large the problem is.
The Journal Sentinel found more than $400,000 in back taxes, fees and demolition costs owed on nearly three dozen properties that lenders foreclosed on in the past two years but didn't complete the process. Three more have been condemned and are scheduled to be bulldozed at an estimated cost of up to $15,000 each.
Cities throughout the country are seeing an increasing number of walkaway properties, said Kathleen Day of the Center for Responsible Lending. She said she knew of no other attempt to quantify the extent of the problem or its impact on a city.
"We hear about it anecdotally all the time here - all the time," Day said. "This is just madness. There has got to be some better way."
http://www.jsonline.com/watchdog/watchdogreports/50548282.html
Lenders don't take title when they think the house is worthless. Expect walkaways to keep increasing as the economy deteriorates. As it starts to happen in a particular area, it infects the surrounding homes and lowers their values. Just like the FU virus has reached pandemic stage, there is seemingly no stopping the walkaway virus either.
Entire sections of towns will be leveled and converted into green space. Cities will see their property tax revenues evaporate leading to less and less funds available to continue with services.
Welcome to Concentric Contraction my friends. The economy and industrial era as we knew it is ending, prepare for a much more exciting and dynamic times.
But in the mean time, you must prepare for change.................9.09 has drawn the line.
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