After foreclosures, crime moves in

As defaults surge on mortgages made to borrowers with spotty credit and adjustable-rate loans, more people are noticing that their neighbors are caught up in the meltdown. Their misfortunes are haunting those left living on the same streets. The effects aren't confined to just low-income or redeveloping communities; they are seeping into middle-class neighborhoods and brand new developments.

Smith, the vice president of Westview Community Organization Inc., keeps a map of the area, tracking each vacant property and notifying local officials when nefarious activity is suspected.

Georgia has the eighth largest foreclosure rate in the nation, one filing for every 142 households, according to a third-quarter report from foreclosure tracker RealtyTrac Inc. Nevada has the worst rate with one filing in every 61 households, while the nationwide rate is one filing for every 196 households.

"They've seen a lot of prostitution in the area, vagrants wandering in and out of the empty houses, and drug activity," said Officer Dakarta Richardson of the Atlanta Police Department. "Some people that I talked to are afraid to walk out of their homes at night."

Some other people in the area have been affected by break-ins, and there have been house fires in several of the vacant homes in the past year, Richardson said.

The rise in crime in Westview is typical of a neighborhood struggling with numerous foreclosures, according to a recent study by Dan Immergluck of Georgia Institute of Technology in Atlanta and Geoff Smith of Woodstock Institute in Chicago.

That study showed that when the foreclosure rate increases one percentage point, neighborhood violent crime rises 2.33 percent.

"The key here is the concentration of those foreclosures at a neighborhood level. When you have more than one foreclosure in a few block area, that's when you start to think about the effects on property values and the effects on crime," Immergluck said.

A report published last week by the Center for Responsible Lending, a Durham, N.C.-based consumer advocate, estimates that 44.5 million US households will see their property values decline a combined $223 billion as foreclosures surge in coming years, particularly in minority communities.