This week in our inky little print edition, I wrote about last week’s Livable Memphis presentation on Stabilizing Home Ownership in a Post-Foreclosure Environment. (I know; it's wonky, but that doesn't mean it's not important or interesting.)
One challenge to the foreclosure crisis has simply been getting a handle on what’s going on. The Mid-South Peace & Justice Center, which will be leading a discussion on foreclosures July 14th, estimates that there were almost 50,000 foreclosures in Memphis from 2000 to 2009.
(There were 82,947 foreclosure notices between that time, and they estimate that 60 percent of them resulted in actual foreclosures.)
One thing both Betts and Mid-South Peace & Justice mentioned was “shadow inventory," and how it makes getting a handle on what's happening in local neighborhoods even more difficult.
In more vulnerable neighborhoods, banks seem to be sending foreclosure notices, but aren’t finalizing the process b/c of excess inventory in those neighborhoods. However, residents, on receiving those notices, sometimes choose to move out pre-emptively. Which leaves a vacant home that no one claims responsibility for.
Additionally, in what Betts calls “neighborhoods of choice,” there is evidence that banks are holding off selling foreclosed property in the hopes that they can get a better price once the market rebounds.
In all, CBANA’s data showed that 24 percent of 2008 foreclosures were still bank-owned.
“Real-estate owned inventory appears to hold steady and influence pace of completed foreclosures,” a slide in Betts’ presentation noted.
For the Peace & Justice Center, the shadow inventory suggests the threat of additional foreclosures.
“What makes this a chief concern to the efforts to end homelessness is that it cannot be presently determined how many of these properties in limbo are still occupied by the original residents,” says an executive summary of MSP&J work. “There may be a significant number of families who are basically stuck in the process of being foreclosed on, or could be on the brink of suddenly becoming homeless this year.”