Foreclosure Crisis and Cities Essay Example | Topics and Well Written Essays - 500 words

Foreclosure Crisis and Cities - Essay Example At the beginning of 2008, with the weakening of US economy and losing of jobs, these defaults became millions and many Americans with plain-vanilla prime mortgages were also in trouble for making the repayment. Some borrowers were compelled to give up the repayment, finding that they had paid inflated prices for houses while others were in trouble by borrowing against the equity in their homes. According to Federal Reserve, more than $1.1 trillion of equities were withdrawn in 2007-08. Even the borrowers who have stable jobs started to see these negative equities as reason for stopping the payments and by the beginning of 2009, one-sixth of the homeowners found default borrowers, culminating the foreclosure crisis (Immerdeck, 2009). A large number of foreclosed dwellings all around the country were left vacant when the owners just walked away from the properties as they were unable to repay the loans. These empty dwellings created blight and contributed to the deterioration of neighb orhood. This resulted in the drop of property value and increase of crimes.