Denver City Council Creates Task Force on Foreclosure

The Denver City Council created a Foreclosure Task Force to discuss the impact of Foreclosure on their city. I was amazed at the depth of the study and the impact foreclosure has on a city or community.

I've always concerned myself on the personal and private affects of foreclosure. I haven't taken the time to understand it's affects on neighborhoods, schools, churches and communities.

The twenty-three task force members of the Denver City Council met January 25, 2007 to develop strategies to protect Denver's community. Currently in Colorado, there are 19,000 foreclosures, one for every 376 mortgages. As of the study, 37,000 home loans were in delinquency. Council-members wanted potential buyers and current homeowners to know how this happened. They also wanted legislators to know how to protect communities from the effects of foreclosure.

I don't want to minimize the affects of foreclosure on you, the homeowner. It is privately and personally devastating, both financially and emotionally. But, let's take a look deeper into the community.

On the neighborhood level, the task force found that properties in foreclosure are often abandoned and unkept. Complaints and subsequent investigations into abandoned properties puts a burden on the city. City workers often have difficulty distinguishing between abandoned homes and neglected homes. It's difficult to locate the responsible party so that the home can be brought back to neighborhood standards. This only creates more labor and costs to maintain neighborhoods.

The council members interviewed Rev. Dr. James Fouther of the United Church of Montbello in regard to the affect of foreclosure on the faith-based community. He felt that neighborhoods are losing their stability in two areas. Obviously, the foreclosed families are having to leave. Secondly, the remaining families are not feeling secure in their neighborhoods anymore. Property values are decreasing which affects neighbors and elderly residents who are needing to obtain reverse mortgages or equity loans to help pay for their health care. The Reverend can feel the strain of people's finances as the patronage to the local food pantry increases.

In regard to the impact on schools, an elementary principal was interviewed. Foreclosure has affected not only created a vacillating number of children in attendance, but also children involved in foreclosure often miss up to six weeks of education due to transitions. Administrators have seen increases in aggression, including theft and violence, due to increased stress and uncertainty that children experience when their parents undergo foreclosure.

Tom Clark, the executive director of the Metro Denver Economic Development Corporation noted a direct link between foreclosure and the recession and job market losses since 2002. Housing prices have risen to a national high in the
Denver area while inflation rates have plummeted to 0%. Adjustable rate mortgages made of 32% of loans in 2004. High risk financing, high risk buyers plus 0% appreciation has created foreclosure problems.

There may not be any quick answers to these problems that have been building over 5 years, but the Task Force is willing to explore legislation and counseling agencies that can educate and protect future Colorado homeowners from similar disasters.

The information used in this article cam from www.denvergov.org.


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