Councilman walks away from mortgage
Detroit neighbors fear move attracts vandalism, blight
DETROIT - It was their dream home, a two-story, four-bedroom colonial in one of Detroit's nicest and most stable neighborhoods.
But then, one day in December, City Councilman Kwame Kenyatta and his wife packed up their belongings, locked the doors, mailed in the keys, and walked away - adding another vacant house to the thousands in a city hard hit by the nation's mortgage crisis.
"We're already underwater when it comes to what we're paying on the house versus what the house is worth," Kenyatta said.
Around the country, the practice, sometimes referred to as "mortgage walking" or "jingle mail," appears to be growing. But for Kenyatta, the decision could do more than hurt his credit rating. It could damage his bid for mayor of Detroit this summer, particularly since he has been one of the city's most vocal supporters of measures to improve neighborhoods and halt blight.
"If I'm going to follow you, you need to be a leader," said Patricia Dixon, a former neighbor of Kenyatta's. "You don't show leadership by walking away from your home in the city of Detroit. You have vandalism where they find out the houses are vacant. You have people stealing fireplaces."
Kenyatta, a Democrat, is not the only elected official facing mortgage trouble. The Wayne County prosecutor's Detroit home has gone into foreclosure. And Representative Laura Richardson of California nearly lost her home before she paid delinquent home loans.
Walking away from a mortgage isn't illegal; the bank takes possession and tries to sell the house. But "it just puts more properties in foreclosures, and that's the last thing we need right now. That's just pulling the median sales price down," said Karen Kage, who runs a real estate listing service in suburban Detroit.
In Detroit, the median sales price for a home is now a pathetic $5,800, down more than $66,000 from seven years ago. An estimated 16,000 foreclosed homes are on the market in the city of about 920,000 residents. Detroit also has one of the highest unemployment rates in the nation, around 20 percent.
Kenyatta's former neighborhood, North Rosedale Park, offers stately well-kept brick homes along quiet, winding streets. It fights to hold off blight from surrounding northwest side neighborhoods.