banktime.com

Bank of America has included in its program to donate homes for demolition in Detroit, Cleveland and Chicago held sessions for homeowners to meet with mortgage-modification specialists. Five hundred customers showed up in Cleveland, sixteen hundred in Chicago and fourteen hundred in Detroit. Furthermore, BoA competitor Chase Bank has also established a down-payment assistance program for Detroit city employees to move into vacant homes in designated areas, and CitiMortgage held events in several cities last summer where around one thousand homeowners met with officials about mortgage problems. Of that amount, nine hundred of those homeowners were at least sixty days behind on their mortgage payments, and three hundred were in foreclosure. In September, Citi announced that as many as six hundred distressed homeowners had met qualifications for loan modifications. Even with this kind of help, however, many homeowners simply cannot keep up with the payments when bogged down by negative equity, job loss, and the continued fallout from the Great Recession.

Then there are those who aren’t interested in holding onto their homes. According to Rebecca Mairone, the national mortgage outreach executive for Bank of America Home Loans, some homeowners faced with economic hardships have moved into other housing and “in many cases have walked away from their homes, leaving behind vacant and deteriorating properties that can cause neighborhood blight.” They simply don’t want anything else to do with the money pits that were their homes, so they chose to take the consequences for walking away.

If the original owners are disinterested in maintaining the property, conventional wisdom holds that reselling the properties would be the next-best course of action for the banks. But, as we discussed at the beginning of this post, location can be a real killer when it comes to marketing even the most reasonably-priced home. Of the stagnating foreclosures, most of the homes are in areas with dwindling populations and few buyers. Detroit activist Jeff DeBruyn points out that Detroit covers one hundred twenty-nine square miles in area and was built to house two point two million, but is currently losing fifty thousand residents a year and currently houses just seven hundred thousand people.

DeBruyn says that he has previously been an advocate for the homeless, a community organizer who helped reopen an abandoned apartment complex and most recently a self-described “entrepreneur” of The Imagination Station, a nonprofit whose ultimate goal is to construct “a creative campus in Detroit built on community, technology, sustainability and the arts.” His immediate goal, however, is rehabilitating two blighted homes across from Detroit’s historic, long-closed Michigan Central Station. For DeBruyn, the deciding line for whether a foreclosed home should be saved is whether it is the only one in an area and is in good condition. In those two cases, he says, it probably should be saved. But he cautioned that “you can’t leave property abandoned for a minute” before bad things start to happen.

One suggestion he has is that, if homes are in foreclosure, it might be a better use of the public’s time and home to “make way for a better use” of these properties. He points out that a large number of properties in Detroit fell into public hands after landlords ignored nuisance-abatement procedures. Still, he says that if it makes neighbors happy to see houses come down, then he is happy too. Detroit doesn’t need to lose any more residents to apathy and dissatisfaction, after all.