Monday, October 3, 2011

Abandoned Home Shows Effects of Predatory Lending - Chicago News Cooperative

Abandoned Home Shows Effects of Predatory Lending - Chicago News Cooperative
In November 2004, Wanda Carter bought a home at 6548 South Morgan Street on the South Side and thought she got a good deal.

A bank lent her $142,000, which covered the sale price and loan fees, and provided $20,000 to fix up the place. To Carter, it seemed as if the bank was paying her $20,000 to take the loan. She did not even have to come up with a down payment.

After the deal closed, Carter discovered the house needed structural work that would cost far more than $20,000. Then the man she married about a year after moving in received a diagnosis of late-stage cancer.

Carter soon fell behind on her mortgage. After a bank advised her that the best way to settle her mortgage debt was to evacuate and let a lender sell the house, the couple moved out. Instead, banks let the house deteriorate, and now it is an eyesore in its Englewood neighborhood — the kind of house that devastates nearby property values.

“This place is a disaster,” said a neighbor, Ernest Hearny, surveying the trash-strewn yard of the boarded-up home. “There’s nothing inside. Gangbangers got in there and got high, had sex. The odor is so bad. They took the pipes, the plumbing, everything. It started going downhill when the people moved out. ”

Carter’s story is more than an all-too-familiar tale about the ravages of predatory lending. It is also an example of why the Woodstock Institute, a nonprofit research group specializing in housing issues, just reported that Chicago’s inventory of foreclosed homes continues to be at record levels. Red tape, clogged courts, victimized borrowers and overwhelmed banks have created a glut of abandoned homes mired in a foreclosure nightmare.
 I think you should read the whole article. Probably the story of many abandoned properties throughout Chicago's south side. Perhaps a case for financial literacy to make sound decisions in real estate investments!

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