Homeownership Groups Warning of Economic Fallout from Increase in House Foreclosures

DETROIT LAKES (KDLM) – Homeownership groups are warning of economic fallout from house foreclosures.

State and national programs that allowed struggling homeowners to pause monthly payments during the pandemic have reached their limits for millions of borrowers. Minnesota non-profits say that’s why they need more exit plans to prevent lasting economic devastation.

A report from property analysts CoreLogic estimates one-point-two million U-S homeowners saw their forbearance protections reach the 18-month limit this fall. Habitat for Humanity president Chris Coleman says creating more pathways for debtors to dig out from past due amounts is vital. A foreclosure not only harms the borrower, Coleman says, but the community as well. “You have the physical impacts of having abandoned homes or homes that are not being kept up, or you have the costs of that, which number in the millions.”

Estimates show every foreclosure costs a community $80,000 because of resources tied to the process. And when a wave of foreclosures occur, those costs multiply fast amid a backlog of properties.