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For every 1 percent of foreclosure there is a 2.33 percent increase in the rate of violent crime, according to a study released by Dan Immergluck of Georgia Tech and Geoff Smith of the Woodstock Institute. They only found one other study that investigates the correlation between foreclosures and crime and it was conducted in Chicago. The study indicated a couple of things:
• Foreclosures, particularly in lower-income neighborhoods, can lead to vacant, boarded-up or abandoned properties, which in turn, contribute to “physical disorder in a community that can create a haven for criminal activity, discourage social capital formation and lead to further disinvestment.”
• Using conservative estimates, Immergluck and Smith also concluded that each conventional foreclosure within an eighth of a mile of a single-family home results in a 0.9 percent decline in property value.
Lockhart added there is a large cadre of firms who provide loans to individuals with low credit scores, which only perpetuates the cycle of inability to pay, leading to foreclosure.
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