Rising foreclosures reshaping communities

USA Today reports:

ATLANTA � If you're like most homeowners, you've probably never given much thought to whether your neighbors pay their mortgages on time. You've got enough to worry about.

Dannice Clark was like that. She'd skip newspaper articles about the trouble with "subprime" loans for people with risky credit. While fixing dinner, she'd tune out TV reports on how subprime defaults are accelerating the nationwide pace of foreclosures. Why should she care? She had a fixed-rate loan on a 5,000-square-foot home with two kitchens in Waters Edge, an upscale subdivision in Stone Mountain, just outside Atlanta.

Here's why: Clark has been trying to sell her home for nearly five months and hasn't had one offer � even after cutting the price to $334,900 from $359,000. The problem is that her street is dotted with four foreclosed homes that lenders are trying to unload for less money.

"It's truly affecting the sale of my house," says Clark, 45, who works for the U.S. Postal Service. "Why pay full price for my house when you can pick up a foreclosure for $30,000 or $40,000 less?"

And as thousands of homeowners across the nation are learning, it's not only home values that are being affected by the foreclosure crisis. When foreclosures rise, as they have in Waters Edge and other middle-class areas amid the meltdown of the subprime mortgage market, they can unravel the social fabric and reshape neighborhoods.

The crime rate can rise while the quality of the schools goes down. Homeowner associations can see their treasuries drained. Nearby businesses close their doors, and local tax revenue suffers.

Heh.