Vandalsim and Crime Linked to Foreclosures

28 03 2008

News of foreclosures so far have focused largely on the affects of financial markets and individual families, and deservedly so. But there is another dimension to the mortgage crisis that thus far is getting scant attention – vandalism and crime. Low to middle-income areas, particularly in new developments, with high foreclosure rates create pockets of unoccupied homes vulnerable to vandalism, theft, and other types of petty and even violent crime.

Consider North Carolina. A Charlotte Observer investigation found the following:

“While the crime rate citywide held steady, the rate in the heart of Charlotte’s 10 highest-foreclosure areas rose 33 percent between 2003 and 2006, an Observer analysis found. All of them are suburban areas filled with starter-home subdivisions. They were built since 1997 with homes valued at $150,000 or less.”
The Charlotee Observer, Dec. 09, 2007

“In Peachtree Hills, police are summoned nearly 300 times a year, mostly for property crimes in the 147 homes. But the 4-year-old neighborhood, near Sunset Road, has also seen robberies, shootings and gang displays more commonly associated with violent urban areas — not new subdivisions.”
-The Charlotee Observer, Dec 09, 2007

“In 13 neighborhoods at the heart of Charlotte’s most concentrated foreclosure areas, police recorded 52 violent crimes and 395 property crimes last year. That’s not as high as troubled inner-city areas, but it’s up 33 percent in three years and it’s surprising in new suburbs.”
-The Charlotee Observer, Dec. 09, 2007

As a result, another little known industry is thriving. Property maintainers are being called upon by banks to keep up appearances, as it were. Lost Pond Construction Inc in Ohio is a typical example:

The most common job is simple: An exterior inspection to make sure someone is still living in the house after the owner starts missing mortgage payments. If the owner is still there, the contractor does nothing more. Safeguard commissioned 4.8 million of those inspections last year – about 12,000 in Northeast Ohio just during September and October, the latest months for which local numbers are available.

In the fraction of cases where the home goes into the foreclosure process, a contractor like Lost Pond is sent by Safeguard to make sure the house is secure by doing things like changing the locks and boarding up any broken windows.

Once the foreclosure process is complete and the lender takes ownership of the house, Safeguard offers a range of services to the lender – including remodeling, repair and cleaning services. Safeguard did about 2,000 of those jobs in Northeast Ohio in September and October.

Perhaps, this is proof that markets do have a certain magic to them.

By spotting these vulnerable areas ahead of time and working jointly with local police forces, lenders, municipalities, and the federal government, we can find a way to curb the depreciation of these newly developed properties and reduce crime. That way these neighborhoods can still be attractive to future home buyers once the mortgage industry rebounds.

But, of course, the main focus should be on preventing foreclosures from spreading in the first place.

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29 03 2008
North Carolina Foreclosures » Blog Archive » Vandalsim and Crime Linked to Foreclosures

[…] Moe wrote an interesting post today onHere’s a quick excerpt […]

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