Some banks walking away from foreclosures
01/14/2011
By Credit.com Staff
Many lenders are now walking away from foreclosed homes after evicting the residents, leaving thousands of properties nationwide empty and compounding several industry problems, according to research from the Woodstock Institute. Often, this is because a bank may find that the value of reselling the home is not worth the costs associated with completing other necessary transactions.
In addition, government studies have found that 48 percent of homes simply fall vacant after a lender walked away from the property, the report said. Conversely, when lenders abandon the properties before starting the process, only 30 percent of homes eventually became vacant.
Several recent reports have shown that vacant foreclosed homes tend to depress property values in affected neighborhoods and cities for years, with some likely to keep home values in these areas below their pre-recession levels for decades.
