MASSACHUSETTS FORUM
By Judith Liben and Tim H. Davis
In light of the current financial crisis and the public outrage over taxpayer-subsidized bailouts, it only makes sense for banks to explore every possible avenue to mitigate the damage to families and communities caused by foreclosure, while at the same time shoring up their bottom lines.
But foreclosure alone is not what ravages communities. A large share of the damage results from the post-foreclosure eviction policies of the lending industry. What do banks and servicers do with the “real estate owned” (REO) properties that they repossess after foreclosure? They quickly evict the tenants and former owner-occupants, leaving families displaced, perhaps homeless, and buildings vacant and vulnerable.
Abandoned homes are subject to vandalism and crime, quickly lose value, depress the worth of nearby properties, and force cash-strapped municipalities to expend critical resources confronting the inevitable health and safety risks that emerge.
In light of the current financial crisis and the public outrage over taxpayer-subsidized bailouts, it only makes sense for banks to explore every possible avenue to mitigate the damage to families and communities caused by foreclosure, while at the same time shoring up their bottom lines.
But foreclosure alone is not what ravages communities. A large share of the damage results from the post-foreclosure eviction policies of the lending industry. What do banks and servicers do with the “real estate owned” (REO) properties that they repossess after foreclosure? They quickly evict the tenants and former owner-occupants, leaving families displaced, perhaps homeless, and buildings vacant and vulnerable.
Abandoned homes are subject to vandalism and crime, quickly lose value, depress the worth of nearby properties, and force cash-strapped municipalities to expend critical resources confronting the inevitable health and safety risks that emerge.
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