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Foreclosure and debt can affect everyone

April 25, 2008

I often say, “Debt doesn’t discriminate.”

People find themselves facing financial difficulties for a variety of reasons. Often poor money management is the reason people are struggling with money, but sometimes it’s job loss, reduced income, or medical debt that created difficulties. Other times divorce or the death of a partner can create financial turmoil.

There are plenty of people who have what might be considered “good” jobs with “good” pay who find themselves in need of a financial overhaul.

Take for instance this story from the New York Times. The story focuses on homes in jeopardy of going into foreclosure in

Greenwich, Conn., a very wealthy community. It seems surprising, but as you read the story, it is evident problems faced by the affluent can be the same as the non-affluent; it’s just on larger monetary scale.

But, no matter where you are on the income spectrum, foreclosures affect everyone — even those people who are paying their mortgages.

Homes in foreclosure can drive down the value of neighboring homes. In some neighborhoods, empty homes have become havens for the homeless or people just looking for a place to hang out. Some homes have become targets for vandals, while others have been raided by thieves and stripped of copper wiring, plumbing and appliances that can be sold for cash.

MSN columnist Liz Pulliam Weston detailed this problem in a recent article. You can read the article in its entirety here. But, one thing really stood out to me. Weston cites a new report by the Pew Charitable Trusts that estimates “40 million homeowners may see their property values and their municipalities’ tax bases drop by as much as $356 billion in the next two years” because of foreclosures in their community. Weston calculates that as a per-household loss of wealth of $8,771.

I certainly don’t have an answer to this problem, but I think it is very important for people to be aware of what is going on in their communities and be proactive about trying to stave off foreclosure.

I can’t stress enough how important it is for someone who is struggling with their mortgage to look for assistance at the first sign of a problem. Too often homeowners wait until the foreclosure notice is in their hand before they try to get help. Only 40 percent of borrowers actually contact their mortgage lenders before they receive a foreclosure notice.

If you are worried that you may have trouble paying your mortgage, contact your lender immediately. If you are not comfortable contacting your lender or would like help exploring the options that may be available to help you, contact a non-profit credit counseling agency, like Advantage CCS, that offers housing counseling.

Please don’t wait too long to get help. Likewise, if you know someone who may be struggling, encourage them to get assistance as soon as possible.

Written by admin · Filed Under Housing 

Comments

One Response to “Foreclosure and debt can affect everyone”

  1. Tim Ramsey on April 25th, 2008 1:31 pm

    I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

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