Protecting Value Of Your Home By Helping Neighbors

How far are you willing to go to protect the value of your home? So far as to boost the value of your neighbor’s foreclosed home?  Apparently, that’s what some folks are considering around the country in an effort to help their houses retain value.

I recently read an article at The Passive Dad pitching the idea of a neighborhood protecting their home equity through collective sweat equity. In the article he mentions home values dropping 40% in his neighborhood, and foreclosures cropping up around his own home.  True enough, living next to a foreclosed home can cause make your own home a tough sell, but I’m not sure how far I’d be willing to go to help a bank push through a sale.

When a foreclosure occurs the bank itself is stuck with the home and often tries to sell it for enough to pay off the remaining balance, or at least a significant amount of it.  Any amount they cannot recapture via selling winds up being written off, much to the chagrin of shareholders.  Still, unless the house was dilapidated to the point that the disrepair crept onto my property, I’d be inclined to let it stay that way.

What I would be far more willing to do would be to help my neighbors avoid foreclosure in the first place.  If financial contributions are not feasible, I would gladly help neighbors make necessary repairs, cleaning, upgrades, etc. to help get the house sold.  Imagine how quickly a group of neighbors could paint a home if everyone grabbed a roller and a brush!  Amish communities pitch in to raise entire barns in the same time!

The article raises a good point–when the dust settles from the financial downturn, will banks be less respected because of their culpability in creating an environment where interest-only and adjustable rate mortgages were oversold to those unable to afford a home?  Or will politicians, or the consumer themselves, be held to blame?  It will be interesting to see how it all plays out in time.