More fallout from the Subprime Loan Fiasco
As defaults rise due to subprime mortgages or ARM loans, many individuals are witnessing their neighbors caught up in the meltdown. And the defaulters misfortunes are severely affecting those who are left living in those particular communities.
Furthermore, the problem is not simply restricted to the poorer areas, because they are also finding their way into upper/middle-class neighborhoods as well.
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In the Franklin Reserve neighborhood of Elk Grove, California, for example, which has a plethera of expensive houses, they are fighting various inner-city issues such as gangs, narcotics, arson, theft and of course a lot of graffiti.
You see, during the height of the boom, this suburb near the state capital grew 10,000 houses in only 4 years time, attracting investors from the affluent San Francisco bay area. Now many of those same houses are empty, with weeds overtaking their lawns, and various bank repo signs
lining the area. Median house prices have dropped from around $570,000 to the low $400,000s or so, unfortunately.
As a matter of fact, it may surprise many individuals to note that California ranks 2nd out of fifty states in the country with 1 foreclosure filing for every 88 households, according to the statistics.
Yes, number 2 on that most unprestigious of scales.
The house owners themselves have no options but to accept any renters they can find, according to the folks involved in regional real estate there.
Furthermore, criminal elements have looted some of the vacated houses, even going so far as stripping them of copper wiring plus pipes which may be then sold as scrap to recyclers.
Banks are not watching their foreclosed properties very closely, according to Modesto Police Chief Roy Wasden.
Crime reports in Franklin Reserve rose by almost half percent in May, to 100 from 69 in the same month last year if you can believe that huge increase.
To deter crime, the community policing unit is charged with working with code enforcement officers on problems such as unkempt homes and patrol officers swing past vacant homes as part of their normal duties. But there has been no increase in police budget, overtime or staff as a result of the empty homes.