Scam Artists Highlight Chicago's Foreclosure Woes
CHICAGO, March 27, 2007 — -- On Aberdeen Street, on Chicago's South Side, there is a new and unwelcome neighbor as home foreclosures alter the neighborhoods.
"Here's a nice bungalow that's boarded up," says Deborah Moore from behind the wheel of her Volkswagen. "So that's two on this block."
The growing number of abandoned homes with plywood nailed to the windows is prime evidence that the foreclosure crisis has moved in.
"It starts on one block. You'll get two or three foreclosures on a block, then the block goes downhill," Moore explains. "Then it spreads to the next block. It really does have a snowball effect."
That effect includes lower property values and more crime. Mark Hill is already feeling the impact at his South Side residence. In the year since he and his wife purchased their first home, five neighboring houses have gone into foreclosure. He can see the trash-strewn yards and graffiti-covered plywood from his living room.
He said he wonders what the value of his house is, after a year in which five homes were boarded up right next to his home. "We don't know what to do," says Hill.
The scam artists have also moved in.
Ed Sanders, who couldn't keep up with rising interest rates on his adjustable rate mortgage, got hundreds of letters from companies claiming they could help him keep his home.
"I was scared to death … really scared," he says. "They told me if I didn't call or do something the sheriff was going to take my home."
So he paid one company a thousand dollars and expected assistance, but he got nothing in return.
"I really feel they took advantage of me. I don't know how I'd ever get that money back, so it's just a loss," Sanders says.
In 2004 there were more than 13,000 foreclosures in the Chicago area. This year, as interest rates on more adjustable rate mortgages ratchet higher, that number is expected to nearly double.
In Chicago, the problem has grown so severe that the city is taking aggressive action to help residents keep their homes.
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