Home Foreclosures Hit Rich Too

By Justin Gardner | Related entries in Economy, Housing, Money

From Reuters:

With a pretty red-brick downtown lined with stores, good schools and a railway line to nearby Chicago, Hinsdale has been popular among wealthy doctors, lawyers and executives.

It has also seen a 37 percent jump in foreclosure filings this year, according to research firm RealtyTrac, and local data shows the average home sale price has fallen to $1.07 million from $1.15 million in September 2007.

The consequences of years of devil-may-care mortgage lending during the U.S. housing boom were first felt among America’s poorer home owners. But if that is where it started, it did not stop there.

“People think this is just a lower-income problem,” said Mabel Guzmann, a Century 21 realtor in Chicago. “It’s not.”

And let’s be clear here…it takes a lot more of the subprime foreclosures to equal just 1 of these higher income foreclosures. So when areas like this are seeing a 37% spike in foreclosures, I hope we can all agree that people from all walks of life have acted irresponsibly too.

This entry was posted on Monday, December 8th, 2008 and is filed under Economy, Housing, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

9 Responses to “Home Foreclosures Hit Rich Too”

  1. Loan Modifications Says:

    I live in Southern California and see foreclosure notices in affulent neighborhoods also. In these tough economic times we should keep in mind that it is in the UNITED States and we should keep in mind that this is everbodys problem and not just a select few. Lets UNITE to be solution oriented to this national problem.

  2. Minnesota Realtor Says:

    A lot of times while looking at short sale homes I will see Playstation 3′s, Wii’s, four wheelers, snowmobiles, and all kinds of toys. Oddly enough the properties are facing foreclosure and the majority of them have had no maintenance or upgrades to the house. Makes you wonder!

  3. Brainerd Real Estate Says:

    In the Brainerd real estate market we have 1 foreclosure in 2,651 housing units, that’s according to Realty Trac and seems awfully low to me. We have been selling quite a few foreclosures and the ratio can not be that lop sided. One thing that is for sure is that lending institutions created a ton of loans that they should not have ever considered making and now we are left with brand new homes that are sitting empty because pretty much everyone involved with the new homes were crooked. The contractor, the banks, and the person that ends up getting hurt is the home buyer. Good thing we learned our lesson from the housing bubble burst! Well, let’s hope we did anyways! One thing is forsure, and that is Brainerd real estate market will go on without the first time home buyer tax incentive program.

  4. park homes Says:

    Foreclosure notices seem to be everywhere at the moment but i guess this is the price we play for allowing the banks to lend without a high level of screening for who borrows the money for housing. If this was kept to a tighter level then perhaps it wouldn’t leave many people homeless.

    It is also meaning that less people can buy holiday or park homes now due to so many foreclosures on properties. Its only now a case of people who can afford to buy a home or well any kind of property out right with cash who are benefiting from this.

  5. new homes in north idaho Says:

    Most lenders look more favorably on new construction because new homes are built to the latest standards and tend to be less influenced by market trends. This means, in most cases, through competitive financing, you are able to buy more home for your money. So i guess I would say that those who just let their house foreclosed wanted to move to a new innovative house which they can more enjoy.

  6. danna Says:

    While it is true that home foreclosures may prevent some folks from owning a home due to tighter regulations now on loans, for people who have secure credit, it is a great time to buy. Buying houses at auction, or because of tax lien, is also a cheaper way to acquire a home.

  7. Wayne Says:

    The contractor, the banks, and the person that ends up getting hurt is the home buyer.

  8. dlf Says:

    A person who faced foreclosure might face another problem soon after the foreclosure business ends – he might have problems with lawsuits. The mortgage company can go after him for damages. In all cases, ‘foreclosure’ is considered a damage. Therefore, the person who let the damage happen will be deemed responsible to pay for it.

  9. steve Says:

    Everyone — not just those with sub-prime loans — will feel the pain. Need money for home improvements or college? Don’t count on using your house as a piggy bank; 60 percent of banks are making it harder to get home equity lines of credit. Many banks have raised standards on other consumer loans, which could be a problem if you want to finance a new car.

    The credit crunch is hurting businesses, too, leading to layoffs and fewer new jobs. That could spark more foreclosures, since at least 10 percent of families are upside-down on their mortgage: They owe more than their home is worth.

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