The first mortgage foreclosure on my block, a couple of years ago, didn't seem like it was part of the current housing crisis. A young family moved in — husband, wife and child. Although they were new, they became active with neighbors on the block. Their son played with other kids. Within a few months of their moving in, Mom gave birth to twins. It was a celebratory occasion for block club members. But shortly, things went bad. After some months of the usual agony and loathing, they divorced. The property settlement left Dad with the house and a mortgage he couldn't afford without his wife's income.
The bank took over and attempted to sell the place, but the housing crisis had kicked in by then and there were no takers. The place sits empty today and is the biggest eyesore on the block.
The couple who lives next to the empty house were robbed one morning as they prepared to head out to work. The woman left her computer, briefcase and other things on a seat near a rear window before going upstairs to shower. While she was gone someone broke the window and snatched her things. I can't prove it, but I believe the thief was able to wait in the yard of the empty house and observe until he saw his opportunity.
The second forecloure on the block happened this past fall. I didn't really know the woman who lived there. We'd spoken in passing a few times. Our biggest interaction came when our dogs got into a little scrap and we had to pull them apart. She lived quietly and she left quietly. One day in November, I saw a U-Haul van in her driveway. I thought the vehicle was too small for someone who was moving. I surmised that furniture or an appliance was coming in or going out. But a few days later the foreclosure notice went up on her window. She was gone. No one on the block knows where she went.
The neighbors have done their best to make the house look lived-in. They covered up the foreclosure notice. They raked leaves and shoveled snow. They removed the mail until they got the post office to stop deliveries. They take fliers off the porch.
A bigger truck showed up before Christmas, and two men spent two days loading it. Apparently the woman left a lot behind. Just after New Year's Day the for-sale sign popped up on the lawn.
There are a lot of those signs as this subprime mortgage crisis has swept across the nation. The subprime mortgages generally went to people who didn't have the income to qualify for normal mortages. Due to the risk of nonpayment, these loans came with a higher rate of interest. Some loans were adjustable rate mortgages that started off with low interest rates that went up based on various conditions.
Rising interest rates and a shaky economy have combined to cause a lot of people to default on loans and lose homes.
It's hard to lay the blame here. Is it predatory lenders who make out on the higher interest rates? That could be, but it seems they would rather not go through the bother of a foreclosure and maintaining property. They're in the financial business, not property management. Is it that people so desire to achieve the American dream of owning their own homes that they enter into contracts they simply can't afford? Is it the American economy, with its job security withering and wages falling for working-class people?
Whatever it is, the results are the same. Families are losing everything they put into their homes and having to start again lower on the economic pecking order, and empty houses are blighting our neighborhoods, creating opportunities for criminal behavior.
Linda Smith, executive director of U Snap Bac, a nonprofit housing agency in the Morningside neighborhood on Detroit's east side, says, "It's destroying our neighborhoods. We were touring the neighborhood the other day and on one block there were seven vacant houses in a row."
Karen Hammer, president of the Green Acres Woodward Community Association, my neighborhood in northwest Detroit, reports that "10 percent of the homes in the neighborhood are vacant." The neighborhood has about 1,000 houses so that means about 100 are empty (although not all of those are foreclosures).
A friend of mine who lives in University District, where more than 300 homes are vacant, lives between two empty houses. Neighborhood teenagers decided to make the garage of one of them their meeting place for hanging out and drug use. My friend called the police and had them put out. But with children of his own, ages 10 and 12, he's worried about the draw for criminal activity.
"You need to report what's going on to police and other authorities," says Hammer. "Reporting creates a picture of what's going on."
Smith's 22-year-old organization has had to slow down its homebuilding and family placement activities. "This next year it will be back to basics," she says. "We'll be counseling people on their own finances, educating them on affordability and making sure they can afford the product they buy. Sometimes that means telling people they're not ready to buy a house. But these days we don't have a lot of people knocking at our door who want to buy a house."
Residents are struggling to survive in this atmosphere. A coalition of 12th Precinct neighborhoods is working with County Commissioner Keith Williams for Jan. 26 and Feb. 26 forums at the New Prospect Baptist Church on Livernois. Subjects will include how good samaritans can take care of vacant houses and homeowner economics. Counselors will be available to give one-on-one legal advice on what to do if you are facing foreclosure, how to avoid foreclosure, what are the responsibilities of real estate agents, mortgage companies and banks, and other subjects.
U Snap Bac provides similar aid, but the earlier you get it in the process, the better. "It depends on what part of the foreclosure you are at," says Smith. "If the sheriff is already on the way out we can't do anything."
Once a family is evicted, where do they go? Do they join the ranks of the homeless? Most don't. Seeing that they were able to qualify for a mortgage in the first place means they had some resources. One real estate agent who declined to be named said, "Some of them are leaving the state. Some of them move in with relatives. Some become renters."
Predictably, one effect of the mortgage crisies is that the rich get richer. The rental business is up. Those with financial resources can buy up houses at foreclosure sales and, because this is not a good climate for flipping houses, they become landlords. Some become slumlords. Now that's an American dream.
Finally it becomes one more hurdle for Detroit to clear as it struggles to come back from the brink of oblivion. Empty houses in neighborhoods become crime magnets, eyesores. And the values of good homes near them drop every time another one goes empty.
Then you see plans like that for the new $150 million residential, retail, entertainment Cadillac Centre that will be built on the Monroe block. Somehow I don't think any of the people losing their homes in foreclosure will be living there.
Larry Gabriel is a writer, musician and former editor of the Metro Times. Contact him at [email protected].