Foreclosed Blocks Of Despair In Newark
June 2nd, 2008
The localities pock marked with foreclosed houses have become blocks of despair for the local community in Newark, as elsewhere across the country. In Norwood Street volunteers lounge around the porches of houses with foreclosed signs. They all grew up together in this locality – Ralph Wright, Leonard the first Afro-American to move in during the 70’s, Gene White and Thomas Dudd. They all reared their families here in this working class community. Here they want to remain and to do so they want to keep the health of the block intact.
The irony is that while it is easy to tackle drug peddlers, vagrants and slum gangs they are helpless in the wake of the latest menace – judicial foreclosures. The previous threats pale into insignificance against this danger.
As a result of the past two years of housing bubble as many as 11 out of 57 houses have been foreclosed. In the county this locality has been the worst affected according to first hand reports from a Rutgers University survey conducted by Edward J. Bloustein School of Planning and Public Policy. This is the most detailed study of its kind in Essex County.
The records of the 11 foreclosures in Vailsburg were combed through and analyzed taking into account eight years of real estate activities and interviewing many people. The findings in this modest block showed the same results as those found in New Jersey City and in other parts of the country. Two of the foreclosures resulted from flipping by investors. The units were resold at high prices to unwitting buyers. Another one was the result of predatory lending. Most emanated from greed egged on by easy sub-prime loans at a time when the price of houses was escalating at 50% per year. The investors were financially naïve and relied on rental income to meet mortgage dues. For the majority therefore it was a grab for easy money.
The bubble burst when following the law of economics the housing market began to tumble down. When the value of the house became less than the loan amount, the borrowers could neither sell nor make the lenders agree to refinance.
The net result is that although the banks have accepted the inevitable, written off their losses and started to set their house in order, the folks in the block like the one mentioned in Newark are just beginning to wake up to the menace of foreclosed neighborhoods.
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June 24th, 2008 at 9:20 am
[...] Annabel Hall of North Long Beach misses her neighbours as foreclosures leave behind Long Beach lonely and eerie. The two families exchanged visits but suddenly one fine morning they woke up to find the couple across the street had vanished – quietly and silently gone away, most probably ashamed of their fate. Like many others in this locality they had fallen behind in their mortgage payments and so their house on Morningside Street came to be foreclosed. [...]