VICTORVILLE, Calif. — If NCUA chooses to level the land rather than pay the tab to maintain all the homes it owns in Florida's depressed real estate market, it wouldn't be the first to tear down rather than maintain homes.
In the case of Guaranty Bank, it opted to demolish 16 houses acquired through foreclosure in Victorville, Calif. a high-desert city about 85 miles northeast of Los Angeles. The $15-billion bank determined it was better to knock them down than to try selling the homes, some of which were unfinished, in the depressed housing market.
John Wessman, chief marketing officer for Guaranty, said it was a financial decision to "do the right thing" for its shareholders. But it also made the move due to concerns over the safety of the local community. "We don't want to end up being an owner of a piece of property on which there are various criminal offenses occurring," said Wessman of the potential for gangs to move in. "We made the proactive and very difficult decision to demolish the homes."
Wessman pointed out 12 homes that were destroyed were only partially completed and damaged structurally due to exposure to weather. The four completed homes were not habitable due to damage from vandals, a situation community full of incomplete homes or empty lots. So many of the 16 homes "sat in the middle of nowhere," Wessman said.
According to Guaranty's Wessman, economic and socioeconomic pressures will force more lenders to make hard decisions like the one the bank made in Victorville. "Will we be alone in our decision to knock down homes? I don't think so."
