Bank Foreclosure: Banks Walking Away from Foreclosed Homes

It seems that not only are homeowners walking away from homes they can no longer afford, banks are too. While it’s not widely publicized, it is happening. And, it’s leaving a lot of homeowners and neighborhoods stuck with the fallout of community blight, crime and other problems common to foreclosure homes.

Bank Walkaways: When Banks Walk Away from Foreclosed Properties

Why are banks walking away from many foreclosure properties? The New York Times article, Banks Starting to Walk Away on Foreclosures, explains, stating:

Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate. . . . The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches.

Bank Walkaways Leave Homeowners on the Hook

As the article states, many homeowners who are foreclosed on are frustrated at this process because it still leaves them on the hook for the property. Many wonder why they were foreclosed on in the first place if they are to be left holding the bag when the banks walk away.

Bank Walkaways: Problems Caused

In addition to homeowner frustration, when banks walk away from foreclosed properties, they caused a myriad of problems, eg:

Property maintenance: As in who’s responsible for keeping up the property until it can be cleaned, cleared, repaired and/or demolished.

Vandalism: When foreclosure homes for sale dot the landscape, it invites crime, vandalism, graffiti, and a host of other problems for residents left behind.

Declining Property Values: Because of the above, the homeowners left behind face declining property values. This is particularly acute because when there’s no verifiable owner/lender to hold responsible for the property, the longer it sits. The longer a home sits empty, the more likely crime is to follow.

What’s the solution?

Foreclosure Cleaning Companies: A Good Start in Preventing Crime on Foreclosed Properties

One of the first things that need to be done when a foreclosed property falls in limbo like this is to get it properly cleaned and secured. This means boarding up windows and doors, maintaining the lawn, and removing junk and debris. A full-service foreclosure cleanup company can do all of this.

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