Mounting Foreclosures Lead to Increasing Losses by Investors

March 10th, 2009 | Tags: Foreclosure Notice

Mounting foreclosures across the country is leading to increasing losses for investors. In Portland septuagenarian Patricia Harrell can see three foreclosed units – sold, desolate and unkempt. It seems the houses had been the property of a single investor. This has been causing price of houses in Selvin Street and near about to plunge. Harrel has been living here for the past three decades since 1978. Harrell is worried about the dangers of the boarded-up houses.

Portland in western Lousiville has seen 22 investors owning 202 units. All were foreclosed within a year. The troubles of the investors have become the headache of the entire community as prices continue to tumble and vagrants start to rule. In western Louisville and Shiveley the average house price has dropped by 24%. In 2007 it was $45,000 but in 2008 it went down to $34,250. The fall in this area has been the highest in the metro regions that saw a comprehensive drop of about 3%.

According to state records one Donald Crandall lost the most number of houses to foreclosure in Jefferson County in 2008. It counted to 40 units. 3 were near Harrell and there were 34 houses in West End. By occupation he was mortgage loan officer. This specific case of Crandall has brought into focus the relevance of mortgage licences being issued by the state. Crandall refused to attend to telephone queries. Crandall however is not alone in his woes – there are many others like him albeit not with such staggering figures.

According to a survey conducted by Stock Yards Bank & Trust it seems landlords and investors are behind over one quarter of the total number of foreclosure auctions. An independent research held by Metropolitan Housing Coalition calculated that of all the Jefferson County foreclosures 14.1% were owned in 2007 by various investors. The concentration of such investor owned properties was highest in Portland, California, Park Hill and Russell. Here over half the houses had been owned by investors. As per records eight of the investors each lost over a dozen houses in these localities in 2008.

The staggering number of foreclosures of invested properties is putting a strain on the low-income localities said Cathy Hinko of Metropolitan Housing Coalition. Bob French of Metro Department of Housing and Family Services admitted that the blighted units drew criminals and vagrants like magnets. The neglect is also leading to a proliferation of diseases.