Foreclosures Have a Domino Effect on the Entire Nation

Foreclosures are like a spreading virus that understands no frontiers and has a domino effect on the entire nation. It has led to a fall in municipal revenues, an increase in crime, more numbers of homeless people and a rise in the vacant reo properties.

The National League of Cities conducted a survey that found two thirds of the 211 officials it communicated with, that during the past year there has been an increase in foreclosures in their respective cities. Questions were sent and answered online. A third of them said that revenues had dropped and there had been an increase in deserted vacant bank reo units.

Cynthia McCollum of the National League of Cities commented, ‘There’s reduction in revenues at the same time that more services are needed. Because of foreclosures, people are stealing, crime is on the rise and we don’t have more money for cops on the street.” She is also a councilwoman in Madison.

Over a fifth of the responding officials said that more people had become homeless and were in urgent need for shelter. The numbers had considerably increased during the past one year.

The meeting of the league was dominated by discussions on the negative effects of foreclosures. There are ongoing efforts to secure federal help to boost local measures being taken. James Mitchell a councilman from Charlotte and the head of National Black Caucus of Local Elected Officials said, “The American dream for individuals has now become the nightmare for cities.” The foreclosed houses are attracting crime and disease like magnets.

Peachtree Hills near Charlotte is one of the many localities that sprouted new houses. Today out of 123, there are 115 foreclosed units. There are only a dozen residents left there and they cannot sell off their houses while the value of their houses has decreased. Mitchell said, “It’s starting to be a symbol of what we don’t want to happen to Charlotte.” Most of the foreclosure victims were Afro-Americans who were tempted to the mortgages because of the zero down payment terms. The survey shows that most of those affected were single parents, senior citizens and coloured people.

Even those cities that have been spared the worst onslaught of foreclosures now have to suffer – Riverside in California being one of them. It did not experience the housing boom but is now ranked fourth in the national foreclosure race.