By Jennifer Dixon
Lender: The Joint Economic Committee of Congress wrote in 2007 that foreclosures carry an average cost of about $78,000, while preventing a foreclosure costs about $3,300. Most of the expense ($50,000) is borne by the lender, which takes title to the home and must find a buyer.
The Mortgage Bankers Association said costs to lenders include lost principal and interest payments, tax and insurance on the property, maintenance and real estate commissions when a home is sold.
Homeowners: The congressional report put the average cost to homeowners at $7,200 for lost equity, moving expenses, legal fees and the like. They will likely take a hit to their credit score, which can affect jobs because some employers check credit scores before hiring or promoting workers. Lose a home, and you also lose the tax advantages of owning a home.
Local government: Communities can lose anywhere from a few hundred dollars to more than $30,000 on foreclosed homes, according to a study by the Urban Institute. That includes lost property taxes, unpaid utilities and costs for upkeep or demolition of a property. Vacant properties also can mean lower property values, cutbacks in government services and a rise in crime and blight.
Neighbors: Particularly for close neighbors, studies show a single foreclosure can lower home value anywhere from 0.6 percent to 1.8 percent. The Center for Responsible Lending put the average neighbor dollar loss at $5,800 to $8,700.
(c) 2011, Detroit Free Press.
Copyright© 2015 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com