Marlborough - During one frigid day last month, Code Enforcement Officer Pam Wilderman took a call from an anxious Milham Street resident, who reported that an uncontrolled flow of water was pouring out from a neighbor’s home.
Wilderman, police and firefighters rushed to the scene, and the Water Department shut off the home’s water supply.
Later, Wilderman found out that the home – purchased seven years ago for $438,000 – had been foreclosed. Its former residents had left town without shutting off the water.
Today neighbors are facing the prospect of the home being abandoned and unkempt for a long time.
“Now there’s a potential mold problem,” Wilderman said. “Nobody can live in it until it’s been properly inspected and mitigated.”
In upscale as well as downtrodden neighborhoods around Marlborough and Hudson, foreclosures have been on the rise, causing anguish for the neighbors as well as the homeowners and stressing community services. Wilderman said she and other city services visited nine foreclosed properties in November alone.
“The problem is not just in French Hill,” she said. “It’s hitting all over the city. More and more people are just walking away from their homes when they’re foreclosed.” And until a new owner takes possession, she added, “nobody pays attention to the house.”
ForeclosuresMass, a web site that tracks foreclosures by community, reports that 111 Marlborough properties started the foreclosure process over the last six months. They include properties on Lincoln Street, Boston Post Road, Leoleis Drive, Priscilla Drive, McGee Avenue, Conrad Road and many other locations. ForeclosuresMass says that only 27 Massachusetts communities have more foreclosures than Marlborough.
In Hudson, ForeclosuresMass reports 28 properties have started the foreclosure process in the last six months, ranking it 65th in the state in the number of foreclosures. The properties are on Manning Street, Richard Road, Stow Court, Davis Road and other locations.
Banker and Tradesman, a publication that tracks real estate sales and foreclosures, reports that foreclosures nearly quadrupled in Marlborough between 2005 and 2007, to 59 last year. In Hudson, the number of foreclosures went from 1 in 2005 to 23 last year.
People who are watching the process blame financial institutions who misled unsophisticated buyers, and starry-eyed homeowners who bought more than they could afford with no money down.
Marlborough Savings Bank Vice President Jeff Dale said some recent immigrants have sought refinancing help from his bank after they secured risky mortgages from other sources. The bank has a loan officer, Paula DiGregorio, dedicated to helping Spanish-speaking people who are burdened with now-unmanageable mortgages.
“A lot of people got into sub-prime mortgage situations where they financed 95 or 100 percent of their properties,” Dale said. “Now, what they owe is equivalent to 105 or 120 percent of what their property is worth, and there’s very little we can do in cases like that.”
“We help as much as we can,” said Dale. “But if people are ‘upside down’ in a loan – owing more than a home is worth – we can’t do very much.”
Dale blames unscrupulous lenders who prey on lower-income people. “You can’t sell a $300,000 loan to someone who’s making $15,000 a year,” he said.
Vince Valvo of The Warren Group, which publishes Banker and Tradesman, said that foreclosure trends in Marlborough and Hudson mirror that around the state and the country. While all types of neighborhoods are hit, Valvo said that poorer neighborhoods tend to suffer the most.
“In communities with lower income residents and neighborhoods with older homes, we tend to see more of these foreclosures,” Valvo said. “Lower income residents have tended to take out riskier loans, that later reset at rates that they can no longer afford.”
But he added that people of all income levels have lost homes that they could not afford in the first place.
“People who decided to really stretch and buy the biggest house they could afford with as little down as possible are also in trouble,” Valvo said. “It could be the guy down the street driving the Lexus. He’s got a pool and a car but he’s in debt up to his ears.”
“It’s all part of the culture we have…that it’s our right to be living not just in a home, but a home with granite countertops, three bathrooms and tons of garage space,” Valvo said.
City Councilor Peter Juaire, whose ward includes some of Marlborough’s less wealthy neighborhoods, also agrees that the problem cuts across economic lines.
“Marlborough is a combination of white collar and blue collar, and we all know that the economy is not in the best condition,” said Juaire. “People are losing their jobs, after they bit off more than they could chew when they bought their homes. Some who bought an adjustable rate are now getting hit with a $300 a month increase. Their costs for gas and fuel are also going up. Everything’s going up except salaries.”
And both Wilderman and Juaire agree that foreclosures have led to more troubled properties and, in turn, troubled neighborhoods.
“Some people just walk away after their homes are foreclosed,” said Juaire. “If they don’t winterize, the pipes can break. Sometimes the home gets vandalized.”
Wilderman said she has seen first-hand how neighbors suffer from a neglected, foreclosed home. She took a complaint a year ago about a crowded home on Ridge Road, which she described as a “solid, middle class Cape Cod type neighborhood where everybody keeps up their yard.”
After the home changed hands, “there was suddenly a lot of traffic going in and out of it,” Wilderman said.
“I found out that the owner of the home had been able to purchase a $340,000 home with no money down,” she said. “The very next day he closed on another house on Barnard Road for $500,000, again with no money down.
“Now tell me that person didn’t know what he was doing. Both of those homes ended up in foreclosure within 18 months.”
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