How the Housing Mess Hit My Neighborhood

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ghost towns of the great recessionFor the past few years, when my toddler and I went for a walk around the block in our neighborhood in New Jersey, a suburb of Philadelphia, we passed a spooky-looking house with overgrown trees and a faded stucco exterior. Number 22 looked as if no one lived there, although my neighbors assured me that it was occupied. At least that was the case until about a year ago, when its owner fled her residence for parts unknown. The house has been a blight on the neighborhood ever since. (See the photo below.)

Grass in the unattended front yard got about a foot high until, the township got complaints from angry neighbors, including me. Officials in our township then got someone to cut the grass. A tree fell on the side of the front yard. The roof looks like it needs to be replaced. I am not sure about the interior, but given how bad the exterior of the house looks it probably isn't in very good shape. During a recent visit, I saw a newspaper stuck in the gutters on top of the garage, and the garage door was cracked open for some reason

Our neighborhood is quiet, and some of my neighbors are original owners from when the development was built in the early 1990s. Recently, there was a rumor going around that the empty house was unlocked. Worried about the potential security risk, I called the local police who told me that was not the case. Though officers regularly check the house, I am worried still that it will become a magnet for trouble, as abandoned houses often do.

A Sign of the Times

Number 22 (I am not revealing its precise location for security reasons) may be unique in our neighborhood but it is a depressing sign of the times. According to RealtyTrac, almost 300 properties in Burlington County, where I live, received a foreclosure filing in the past month. One out of 677 properties in New Jersey received a foreclosure notice in October. The numbers would have been higher if it were not for the "robo-signing" controversy which caused some banks to halt their foreclosures, only to restart them again.

Ghost Towns of the Great Recession

But the Great Recession has changed the look of many neighborhoods. And economic circumstances have forced many people to leave the places they called home.

In poorer cities in New Jersey, such as Camden and Trenton, abandoned homes are a serious problem. Officials in Willingboro, a neighboring community, are using federal funds to acquire and rehabilitate foreclosed homes. And a new housing development being built near me sat virtually abandoned until the developer cut his prices drastically.

Millions of houses across the country have been abandoned by owners for a variety of reasons. Oftentimes, people leave their homes because they owe more than their homes are worth. Others got caught up with adjustable rate mortgages where their payments ballooned to levels that they could not afford.

Living With the Effects

I am not sure why my neighbor left the 2,368 square foot place she called home since the 1990s, but she sure left a mess in her wake. RealtyTrac estimates that it will cost $2,556 to fix the property up.

Technically, the house is in "pre-foreclosure," which means that ownership hasn't changed yet. An August 2009 notice of lis pendens was issued, giving public notification that the process was underway. It says the mortgage was originally issued by World Savings Bank, which was subsequently acquired by Wachovia, which was in turn swallowed up by Wells Fargo (WFC). A sheriff's sale may be months away, and longer if the matter is contested. Homeowners are given two chances to bring their mortgages current and can request delays of the sale.

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"I can confirm that we did service the loan through our Wachovia portfolio, and our records indicate we had an inspector at the property just before Thanksgiving," writes company spokesman Jason Menke in an email. "We'll work to get someone out there again soon to inspect the property and address any issues that may exist. We understand the impact vacant and foreclosed homes have on communities, and work very hard to secure and maintain the properties we're responsible for."

While the foreclosure crisis is an annoyance to me and my neighbors, others certainly have it much worse. For example, about 20% of the homeowners in Willingboro are in foreclosure. For now, though, we are going to probably have to put up with the eyesore unless there is evidence that it is a nuisance or a health hazard. According to Kenneth Goldman, South Jersey Legal Service's Litigation Director, poor upkeep "in an of itself ... may be difficult to address until the sheriff sale," he says.

So until the house is sold, it looks like we are going to have to live with it.
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