Our Claremont foreclosure defense lawyers were interested to see a study that estimated the costs of the foreclosure crisis to our state in dollars -- an angle that is rarely reported. According to ABC affiliate KGO, the Home Defenders League, an advocacy group that believes banks have not been dealing with borrowers fairly, put out a March 16 report on the economic consequences of foreclosures in California. Our state has one-fifth of all foreclosures by some estimates, and the League says a total of 1.2 million Californians have lost their homes since the crisis started. The report looks at the cost of lost property tax revenue, local fees and taxes and lowered home values, and concludes that costs could total $650 billion to $1 trillion.
In order to come to that conclusion, the League made assumptions about how many foreclosures we can expect into 2012, as well as estimates of average home values. The decline in value of foreclosed homes alone was estimated at $207 billion; the smaller declines in the values of neighboring homes were estimated at $424 billion. For statewide property taxes, the report said, losses could be as high as $3.8 million, with 53 percent of those losses affecting funding for K-12 schools and community colleges. County assessors have already reported losses for 2009-2010, the report said, some for the first time since the Great Depression. It estimates another $17.4 billion in losses at local government levels, for services like police, unpaid trash collection fees, inspections, court costs and more.
As Costa Mesa foreclosure defense attorneys, we believe we're already seeing some of these effects. Certainly, foreclosures have helped depress the housing market, which ensures that home values stay low and more homeowners stay underwater -- ironically contributing to further foreclosures. And as the report notes, property tax losses have already started and may get better. The report also notes a statement from Los Angeles City Councilman Richard Alarcon, who said local governments can lose as much as $34,000 per foreclosure on maintenance and lost fees. The clearest solution is to avoid foreclosures whenever possible -- but loan servicers have shown little interest in trying to help. In fact, as we've noted here many times, the economic incentives actually reward servicers for pushing borrowers into foreclosure.
Howard Law PC helps homeowners fight to save their homes against this pressure from loan servicers. In our experience as Murrieta foreclosure defense lawyers throughout the housing crisis, loan servicers steer borrowers into foreclosure through extreme disorganization, incompetence and mixed messages that sabotage the borrowers' attempts to be considered for a loan workout. When they run out of money and patience and end up in foreclosure, servicers get a payday by charging steep and sometimes illegal fees. We fight back by helping clients take their cases to court, where a judge can decide whether the borrower's application ever got serious consideration.
If you believe you can save your home with a reasonable change to your loan -- but your loan servicer has consistently failed to consider your case -- quit calling the servicer and call Howard Law instead. To set up a free, confidential evaluation of your case, send us a message online or call toll-free at 1-800-872-5925. s