With foreclosures continuing to increase, related concerns are raising their heads in hard hit neighbourhoods. One such problem is that of growing crime.

Boarded up homes and vacant properties are often sitting ducks for negative elements. These houses are prime targets for burglars and are also used for all kinds of anti-social activities. Thus along with the homeowners the entire neighbourhood gets affected.

This fact is borne out by recent studies conducted by the George Institute of Technology and the Woodstock Institute, Chicago. One study shows that violent crime tends to occur more in neighbourhoods that have had significant number of foreclosures. According to the study a neighbourhood which had 2.8 foreclosures for every 100 homeowners also showed an increase in violent crime by 6.7 percent. Another study found that the value of single-owner homes dropped by 0.9 percent for every foreclosure within a block of the property.

It can be concluded that the greater the number of foreclosures in a locality the less safe it is likely to become and the more the value of the other properties is likely to drop.

Robberies on vacant properties can take various dimensions. Small time thieves may target copper piping or break in to steal air conditioners and other fittings. More enterprising criminals are likely to change the locks and rent out the home to unsuspecting tenants!

A few precautions may go a long way in safeguarding both the home and the neighbourhood. When a property is foreclosed and the homeowners move away, neighbours are advised to keep an eye on the home. They can then inform the homeowners or the relevant authorities if they see suspicious people lurking about or the house falling into disrepair. Many county offices offer access to public records which can help locate the homeowner or company.

Police departments too offer guidelines to help protect property. They advise residents not to make it obvious when they leave their homes. By having the grass cut, newspapers picked up and lights turned on and off, an impression can be created that the house is lived in. It thus avoids undue attention.

Attention to security measures is another important consideration. The police advise exterior doors to be made of solid wood or metal with deadbolt locks and heavy duty strike plates. Windows should have secondary locking mechanisms and gates need to be secured with padlocks.

An alarm system that is switched on when then residents are away or asleep is strongly recommended.

The full list of precautions advised by the Houston Police department can be found at www.houstontx.gov/police/crime_prevention/images/Burglary3.pdf

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Witnessing a major hike in foreclosures, Baltimore City Council feels that lenders should maintain foreclosed, vacant properties which are fast becoming dilapidated. Since the transfer of title is not done till the property is resold, the name of the owner is most often unknown, according to Robert Curran, Councilman, D – District 3. He also sponsored a bill that was introduced at a meeting at the City Council. This would require a notification to the Department of Public Works by all the lenders within a time period of 30 days after the foreclosure of a property.

Within 45 days, the contact details of the lenders would be recorded in a database which the city would maintain. Here, the lender would be listed as the property owner and the title does not necessarily have to be transferred. Because most banks fail to transfer titles after they acquire a home, in cases where the house is not being maintained properly, the housing department invariably brings to book the earlier owner who has already faced foreclosure.

In Curran’s 3^rd District, the problem of too many foreclosures is made worse by the ill maintenance of the foreclosed properties. A recent survey has shown a 793 percent increase in the rate of mortgage arrears as compared to 2006. Preliminary estimates show that the city is losing millions in the form of lost tax revenues due to the dip in the real estate market. The revenue received from recordation and transfer taxes constituted a major part of the city’s surpluses when there was a boom in the real estate market. The budget analysts predict at this point, while the financial year is halfway through, that this time there will be a shortfall of $20-$30 million in receipts.

The city hopes that the new bill will be able to control the authority of the banks and the lenders. A lawsuit has been filed against a practice known as ‘reverse redlining’, where mortgage lender Wells Fargo offered high-priced loans primarily to minority homeowners. City attorneys feel, that for this reason, Wells Fargo Mortgages face four times more foreclosures in a primarily black area as compared to a predominantly white neighbourhood. More accountability would be required from the lenders and they may face more lawsuits. Curran declared that the annual registration fee of $25 would be waived for owners who have vacant plots as they were already paying property taxes at a quite high rate.

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The California foreclosure bill which targeted the ever-increasing problem of vacant foreclosed homes faced a narrow defeat last Wednesday. According to Don Perata, the sponsor of this bill, its objective was to make sure that people stayed in their own homes. However, the Republicans in the Senate argued that the bill would be an unfair burden on banks as well as on mortgage companies.

A Republican Dave Cox, said that, the lenders would be scared away from California by the bill as they could face a fine of $1,000 daily if they failed to maintain vacant properties, and also give a notice of four months before there is a 10 percent or more increase in mortgage payments. The foreclosure rate in California is among the top five and the state, in fact, has the highest volume of foreclosure. Perata goes on to say that, often three or four houses going waste in a neighborhood is a common sight. This problem has been the topic of hot debate in economic circles for many months now, and California is one of the top states suffering from foreclosures in the country.

According to George Runner, who is a Republican hailing from Lancaster, South California, the law should try to pin down home owners who claimed larger loans by lying about their income, as well as on unethical lenders who trap people into taking loans they cannot possibly afford. Perata had submitted the measure in the form of urgency legislation and to be passed, it required a two thirds majority in its favor. However, it failed as there were 14 votes opposing it, whereas only 26 votes were in favor of the measure. Perata admitted that the high foreclosure rate in California was also partly due to fraud, speculation as well as non-viable financial planning.

In California alone 300,000 loans wait to be reset. Last week, the State Assembly introduced parallel legislation which declared that people wanting to buy houses should be able to afford insurance, mortgage and property taxes. The rules governing mortgage brokers and agents dealing in real estate in California were made stricter in tune with the lending guidelines of the federal government. Foreclosed houses have been burgled and stripped of electrical appliances, copper wiring and pipes, all of which can be sold as scrap. It is truly a sad sight to see empty neighborhoods with foreclosed homes.

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