With all of the mortgage delinquencies that are occurring, many lenders have been quick to foreclose on properties as an attempt to stem their losses. However, there are also social problems that are causing lenders to allow homeowners in default to stay in their homes until they sell. This is what is happening:
Widespread Looting of Foreclosed Properties
Looting of empty homes that have gone through foreclosure is reaching epidemic proportions in some communities. Some Cleveland, Ohio communities have been victimized by looters that are destroying empty homes in order to strip them of valuable building materials. Police have even established task forces in Atlanta and other cities to combat the rising looting problem of foreclosed properties.
Nothing is safe. Looters are taking siding from homes as well as furnishings and appliances from within homes. Even the copper wiring is being ripped from inside the walls and from air conditioning units.
Not a Change of Heart
Lenders are not becoming more lenient out of compassion. It’s simple economics.
A vacated property that is vandalized may require tens of thousands of dollars in additional capital in order to bring its value back for proper sale. Otherwise, the lender may be required to sell the property as is for a substantial loss.
It is cheaper for them to allow homeowners to remain in the homes, even if they are no longer making payments. A number of homeowners facing foreclosure have revealed that their lenders not only allowed them to remain in the home until further notice, they even encouraged them to stay.
Lenders are finding that by allowing homeowners to remain in the homes for a few more months until the property can be sold, it dramatically reduces the losses that may result from looting. Even though it is not a change of heart, at least homeowners that are on hard times can get a little reprieve from the inevitable.
Tags: looting foreclosed properties
Any input on how Beneficial handles foreclosures?