November 30, 2007

By: Brian Dickerson

Nov. 30–In the 17th Century, Londoners traced the course of the Black Plague by reading bills of mortality posted in the city’s public thoroughfares.

In 2007, metro Detroiters are consulting the Internet to find out whether the 21st Century pestilence known as foreclosure has infected their neighborhoods, their streets or their cul-de-sacs.

For most of the last week, the top two destinations on the Free Press Web site have been a pair of searchable databases where readers can peruse the burgeoning roster of foreclosure actions in Wayne and Oakland counties.

Even if you are among the fortunate few who can walk your dog without coming face-to-face with the contagion, you probably certainly know someone (or some home) who has succumbed to it.

I’ve resided on three streets since moving here 19 years ago. A cursory search disclosed foreclosures on all of them. When I expanded my search to the surrounding neighborhoods, the number of affected homes tripled or quadrupled.

No homeowner is an island

I want to believe the plague metaphor is exaggerated. Delinquent house payments are not communicable, strictly speaking. Even if they were, my lifelong aversion to adjustable-rate loans and healthy fear of credit card debts would give me more immunity than most.

But a growing body of research suggests that even those who own their homes outright are vulnerable. Foreclosures depress property values, and, even if you’re not selling or refinancing, the resulting erosion of municipal tax collections takes its toll in closed parks, deteriorating streets and shrinking police and fire departments.

Vacant homes invite looters, squatters plying narcotics, and worse. A recent study by researchers at the Georgia Institute of Technology and the Chicago-based Woodstock Institute concludes that violent crime rises 2.3% for every 1% increase in a neighborhood’s foreclosure rate.

So the epidemiological model is apt after all. Our symptoms might not manifest themselves in the same way as our neighbor’s, but anyone’s presumption of immunity is likely delusional.

A national phenomenon

The good news — if the adage that misery loves company is true — is that Michigan’s fiscal crisis looks less like the one-state anomaly the incumbent governor’s critics like to describe and more like the leading edge of a national debacle.

Michigan and its industrial neighbors are still disproportionately burdened with foreclosed properties, but delinquencies are growing even faster in other states.

Nationally, the phenomenon isn’t expected to peak until sometime next summer, a few months after the largest number of adjustable rate mortgages yet reset at higher interest rates.

Wherever they campaign, then, presidential and congressional candidates in both parties will have to address the plague and articulate their strategies for containing it.

Because — to paraphrase Bob Dylan — you don’t need a mortgage banker to know which way the wind blows.