The San Francisco Chronicle ran an article about how the increasing number of foreclosures are affecting entire communities.
“The losses (from foreclosures) are extending to neighbors and to entire communities,” said Martin Eakes, chief executive of the Durham, N.C., Center for Responsible Lending, which released the survey on Tuesday. “The spillover effect is disturbing because we’ve only just begun to see the foreclosures.”
Based on federal home loan data, the group said 22,000 homeowners around the nine-county Bay Area who took out subprime loans in 2005 and 2006 face home repossessions. Those foreclosures could depress the values of hundreds of thousands of neighboring homes by $11.6 billion.
“Foreclosures aren’t causing prices to fall - it’s a symptom of the whole thing unraveling,” Thornberg said. “If you had no foreclosures at all, prices were still going to fall. (Foreclosures) may accelerate the process, but it’s a process that has to happen one way or another because when you look at (home) prices relative to income, it’s completely insane.”
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