Insurance and Foreclosure.
The rising tide of foreclosures carries with it many consequences. One of the unfortunate effects is the likely falsehood that homeowners are abandoning their homes. It appears that speculators are abandoning houses that were vacant when they got them.
There is a new industry in the wake of the foreclosure tide, called "the home inspection business" in this report which focuses on vacant properties in North Florida: Vikas Bajaj, "Foreclosure's Residue /Contractors Are Kept Busy Maintaining Abandoned Homes" p. C1, col. 2 (The New York Times Nat'l Ed., Tuesday, May 27, 2008), available online at www.nytimes.com. The business consists of contractors who inspect abandoned homes for mortgage companies.
While the thrust of the article assumes that homeowners are abandoning their homes in the face of foreclosure, recounting some predictions that millions of homeowners face foreclosure in the next couple of years, one of the examples given is of a house left "vacant for several years", which would put it at at time before the subprime crisis and foreclosure fears began, and instead would place the example of that house squarely in the middle of what once-upon-a-time was called the 'housing boom'.
Insurance companies can often deny claims on the ground that a home once occupied is left vacant for a certain period of time before a claimed loss. It is uncertain, but it is a good bet that there has not been any particular rise in such claims or in such denials.
Rather, an area of inquiry if you will is the number of claims by Mortgage Companies on damage to vacant property for which they issued mortgages knowing the property to be vacant at that time, and the number of denials of such claims by their Insurance Companies. That would offer a better glimpse into the foreclosure crisis.
Please Read The Disclaimer.
