Questions about foreclosure

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These are not rhetorical questions -- we ask them because we don’t know the answers, and we’re interested in your thoughts.

How badly does foreclosure damage neighboring properties? We ask this because today on KNX-AM, we heard Ed Smith of the California Assn. of Mortgage Brokers cite this assertion, made by HUD Secretary Alphonso Jackson: ‘Properties within 150 feet of a foreclosed vacant house lose 10% of their value.’ Ten percent sounds awfully high to us. Your thoughts?

Is it possible for a homeowner to have equity in a home and still lose it to foreclosure? Explain that one to me. If they have equity, can’t they just sell the house? Or, if they can’t sell it, give it to the bank, in a deed-in-lieu-of-foreclosure transaction?

Photo Credit: L.A. Times