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Last Thursday, a report has been released regarding foreclosure issues in Rhode Island. In this report, it has been stated that the foreclosures in this state have taken a huge toll on tenants because there is a huge supply of multi-family properties. Owing to this large stock, the foreclosure inventory with an ample number of available buildings is shrinking and the impact of this is reflecting on the home prices which are increasing on a regular basis.
According to an affordable housing promoting agency HousingWorks RI, in the past three years, among all the foreclosures in this state, one-third of the foreclosures are multi-family apartments and for each such apartment, two or more families have became homeless.
In these past three years, about 2,200 multi-family buildings in Rhode Island moved into foreclosure and as a result, nearly 6,300 families were affected as they lost their apartments which were in these buildings. Another report states that more than 40% of the residents of this state live in rented homes, so on an average for every four people, one person spends nearly 50% of his or her income for housing rent.
Executive Director of HousingWorks, Nellie Gorbea said, “Because you have fewer apartments and higher demand, you have sustained high rental prices. That’s a really bad situation for Rhode Island and for Rhode Island’s economy.”
The total number of foreclosed properties in this state in 2009 was 2,840, and in the following year, it moved down to 1,891. However in 2011, there was a slight increase in the number which was nearly 2,000.
There are three regions in this state which were severely affected by foreclosure: Providence, Woonsocket and Central Falls. Since 2009, about 14% of the total mortgages (of 19,000 people) in Central Falls were foreclosed; in Providence, the rate was about 10% with Woonsocket having the lowest rate among these three regions with around 8%.
These three areas are struggling to recover from this distressed condition. Moreover, the mayors in Woonsocket and Providence also stated that these two areas could also go the same way as Central Falls did when it filed for bankruptcy and it would happen within this financial year.
According to some housing advocates, there should be some additional rights for distressed people who are living in their own foreclosed homes. They are trying to come up with some legal acts which would stop lenders from forcing out these homeowners from their foreclosed homes.
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