By Chuck Sudo
January 13, 2011
It looks like not only homeowners that are walking away from their homes when they get underwater on their mortgages. A new study released by the Woodstock Institute found that more mortgage lenders are walking away from homes as they realize they can’t recoup the full costs of their investments. Some mortgage lenders are going so far as to not complete paperwork on foreclosure actions and filing them with the city. These abandoned homes, mainly in African American neighborhoods, could be costing the city up to $36 million.
These mortgage lenders could also be in violation of city rules regarding upkeep of these repossessed properties. The study finds that 1,896 of these homes have not even been registered as abandoned with the city. Woodstock culled data from the city’s vacant properties registry, as well as buildings identified to the city as vacant by municipal departments, foreclosure court filings made from 2006 to the first half of 2010, foreclosure auctions and property transfers for its study. But given that they don’t know how many properties aren’t registered as vacant, they feel that their numbers are a conservative estimate.