Delayed Foreclosure Raises Stink

Posted in Foreclosures, June 10th, 2008 |

The story is set in Kansas City. Terrie and Carrie Madden are overpowered by the stench coming from the neighbouring stagnant swimming pool. Delayed foreclosures are raising the stink. The financially cornered neighbours exited in August and since then the house to fall into disrepair. The slimy pool and knee-high grass attracted criminals. The Maddens have had to call in the police. It is unsafe and unhealthy to rub shoulders with a property that is worth $280,000.

The instance of this house on West 69th Street is symbolical of what is happening elsewhere – it has become a trend. Delayed foreclosures are responsible for this situation. During foreclosure maintenance comes to a halt. It is a cancer that is spreading bringing down values of neighbouring houses.

Nathan Pare is the head of the department that looks after dangerous properties. He grumbles that the banks are not looking after the buildings they have foreclosed. It needs to be addressed – the problem of why banks are not quickly going ahead with foreclosures. Some say banks are doing this to avoid paying taxes and maintenance. Others opine that the lenders are covering up heavy losses that would otherwise attract regulators. Industry spokesperson’s comment that the lenders are so overwhelmed with increasing number of foreclosures that they cannot manage matters within the limits of their infrastructure. It is not something that banks are doing intentionally.

While arguments are thrown around, the number of vacant houses arising from failed mortgages is quietly spreading its tentacles making life impossible for others. The number may be much higher than the official counts released. Joe Schilling, the founder of National Vacant Properties Campaign complained, “There are more and more properties falling through the cracks”. The foreclosure crisis is much more complicated and complex than it appears and it is getting from bad to worse.

As part of the operations the lender notifies the court about foreclosures Officials of Kansans City determines from records the ownership to find out who is responsible for maintenance, boarding up and or demolition of vacant houses. From the records it is not always possible to pinpoint the current owner if there has been no transfer recorded. The city had to mow the grass and do the general cleaning up process, which cost $1.4 million in the last financial year. The question is – who pays when the owner cannot be located? Ultimately the taxpayer pays.