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Foreclosure Becomes Fact of Real Estate Life

Recession, unemployment, lack of demand takes a toll on Racine home market.

Ignorance isn’t quite bliss when it comes to your neighbors’ . But, some area homeowners said, it’s hard to be worried about the fallout when they’re not even aware of the defaults in the first place.

Besides, said Cece Metzger, there’s not much you can do about them anyway.

“It is what it is,” said Metzger, who works in real estate management. “People are losing their jobs. They can’t stay in their homes.”

Metzger lives in Heartland Village, a subdivision still under construction south of Highway C and east of Highway H. In this area, where the lines between Franksville, Mount Pleasant and Sturtevant might seem to blur if you don’t know the boundaries, streets are dotted with “For Sale” signs, construction equipment and, on one recent afternoon, a few workers assembling the infrastructure for a new house. 

Some homeowners in the area have worried their property values might drop because of foreclosures down the street. There can be a ripple effect when a neighbors’ home is sold for cheap to settle a debt, they said.

“I don’t think we ever thought about that when we moved in,” said Bob, a retiree, who didn’t want his last name used. “But I believe it to be true now. I’m here forever. At least for the next 10 years. I’d never sell it for what I bought it.”

The thought is sobering, even scary, Bob said. But his fear rests more in not knowing what will come after the foreclosure, as in who will move in next door, than in property values tumbling. 

Because, as Metzger also said, property values are dropping everywhere.

“Anyone who looks at their tax assessment knows that,” she said.

That’s part of the reason Racine County officials have been trying to educate people about how to and get help if they do fall behind on their mortgages – or even their taxes.

“More people have to be aware that there is a serious concern with foreclosures,” said 

Racine County Treasurer Jane Nikolai, who tax foreclosures, a three-year process that results when people don’t pay property taxes.

“It effects all of us, not just the person who loses their home, but all homeowners,” she added. “Let’s face it, assessments are going down. Nobody wins from a foreclosure.”

From 2006 to 2010, certificates issued for unpaid taxes, charges and assessments went up more than 38 percent, Nikolai said.

Most have been in the city of Racine, where 40 parcels were in danger of foreclosure this year; 10 other parcels are facing tax foreclosure in the rest of the county, including two in Caledonia and four in Mount Pleasant. There are none in Sturtevant, records show. 

It’s those smaller communities that have seen the biggest percentage increase in tax foreclosures, Nikolai said.

In Union Grove alone, tax foreclosures jumped 127, making it the highest increase since the recession. Sturtevant saw a 120 percent jump, while Mount Pleasant had a 40 percent increase and Caledonia has had about 12 percent more tax foreclosures.

Homeowners who don’t always fall behind on their mortgages, but it’s not unusual.

“The taxes are the last thing people pay, because it goes years without consequences,” Nikolai said; people have two years before the county can start tax foreclosure proceedings, and it usually takes another year after that before the process goes to court and ends in foreclosure, Nikolai explained.

Tax foreclosures can be avoided by trying to make payment arrangements with the county. In fact, county officials prefer that to going to court.

“Going to court is a last resort,” Nikolai said. “If the county forecloses on the property, then the property is off the income tax roll. Plus it depresses the community more. We’re part of the community. And the county really only wants to collect the tax. We’re not in the real estate business.”

That’s a lesson people shouldn’t forget, said Troy Mox, who wasn’t worried about foreclosures when bought a home recently in the Heartland Village neighborhood.

Inflated home values and easy access loans made people too eager to take on homes they couldn’t afford. When the economy collapses, taxpayers paid the price.

“Now, it’s got to get back to normal,” he said. “I guess that’s the way we’re going to live our lives now.”

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