In September, we re-posted a blog from Bank Talk about bank walk-aways, also known as abandoned foreclosures. This is when a bank decides not to foreclose on a property, but also precluding the property from being sold. Today, WUNC profiled this issue, specifically looking at a property in Old North Durham. 212 East Geer Street has become a blight in the past several years, as the bank decided not to move forward in order to stall on the foreclosure:
You see it doesn’t make the bank any money to foreclose in these mostly minority, lower to middle income neighborhoods where the housing stock is old. The proceeds from the foreclosure won’t even cover the cost of the process itself. So there the house sits…
The owner of the property purchased it in 2006, along with several others, as a rental. But when the housing crisis hit, he stopped making payments and the mortgage was sold and re-sold to different banks until it ended up in the lap of Bank of America. Reinvestment Partners, an economic justice organization that provides advocacy on fair lending, located just blocks from 214 East Geer St., has been working to purchase the property to rehabilitate it. But with the convoluted buying and selling of the mortgage, it has taken four years just to get an informal agreement from Bank of America to help with the purchase and rehab.
WUNC reports that there are 38,000 bank walk-aways in the country. Many of these minority and lower-income neighborhoods, as described in the quote above, already are facing significant challenges in overcoming the housing crisis. Bank walk-aways only add more blight and to areas that actually need revitalization. More efforts like those of Reinvestment Partners are needed so that struggling neighborhoods get the investments they need.