BROCKTON, Massachusetts (Reuters) - Shards of broken glass outside the basement window of 31 Vine Street hint at the destruction inside the three-story home.
Thieves smashed the window to break in and then gutted the property for its copper pipes -- a crime that has spread across the United States as the economy slows and foreclosed homes stand empty and vulnerable.
“They cut it here and then pulled it right out of the wall,” real estate broker Marc Charney said, pointing to broken plaster near a wrecked baseboard heating system in the 2,774-sq-ft home in Brockton, Massachusetts, a working-class city of 94,304 people.
Similar stories are unfolding nationwide as a glut of home foreclosures coincides with record highs in the price of copper and other metals.
Real estate brokers and local authorities say once-proud homes coast-to-coast are being stripped for copper, aluminum, and brass by thieves. Much of it ends up with scrap metal traders who say nearly all copper gets shipped overseas, much of it to China and India.
In areas hit hardest by foreclosures, such as the Slavic Village neighborhood of Cleveland, Ohio, copper and other metals used in plumbing, heating systems and telephone lines are now more valuable than some homes.
“We’re in an incredibly unfortunate time where the nonferrous metals commodities market for scrap is at an all-time high. Houses are getting stripped pretty quickly once they go through the foreclosure process,” Cleveland city councilor Tony Brancatelli said.
“We’re seeing houses sold for $100 that are distressed houses that should not be recycled,” he said. Some boarded-up homes in his Slavic Village community have “No copper, only PVC” painted on the boards to stop would-be thieves.
In Brockton, which suffered 400 foreclosures last year, blamed largely on predatory lending, and which is bracing for another 400 this year, Charney said the thieves inflicted about $15,000 of damage on the home on Vine Street.
“I had this property under agreement. We negotiated. The offer was accepted. The buyer came back to the property three weeks later only to find they had gotten in and stolen the copper, so we had to go back to the bank and renegotiate,” said Charney, president of CharneyRealEstate.com.
After haggling, the bank shaved $5,000 off the $105,000 price.
“The problem is there’s almost no security. Does this look like anybody lives here?” he said, gesturing to the boarded-up home with chipped yellow paint and a “notice of foreclosure” letter affixed to its door.
“It’s like a big billboard saying ‘come and take me,”’ he added. “It’s an epidemic.”
Jonathan Osman, a broker in Charlotte, North Carolina, said growing numbers of banks are balking at lending to prospective buyers of foreclosed homes that are stripped of copper pipes and other metals, further depressing housing prices.
“If the appraiser spots something that is not right, like copper tubing lying on the floor or something missing a lot of wiring, that’s a red flag to the buyer’s bank. That will essentially melt down any transaction you’ve got,” he said.
“They don’t want to make a $200,000 loan on a house that has serious problems in case the buyer defaults and they are stuck with it,” he said in a telephone interview. “It stinks for the banks that have foreclosed on the property because they now have a house that they really can’t sell. They have nothing to do but auction it off for whatever they can get for it.”
Along with copper, he often sees air conditioners and garbage disposals torn out. “I don’t know what the solution is other than for the banks to not put a sign in the window saying the house is vacant,” he said, “or maybe keep tenants there.”
At least 15 U.S. states -- from California to New York -- drafted legislation in the past year to deal with the problem, from tighter regulations on scrap metals’ traders to tougher penalties for metal theft, local authorities and metals industry officials say.
“In my district, we’ve got a lot of foreclosed homes and we’ve got a ton of people who are breaking into these homes, stealing the copper wiring right out of the walls,” said Andy Meisner, a lawmaker in Michigan’s state Legislature who plans an April 15 hearing on two bills intended to tackle the issue.
“It is a problem that is really affecting us throughout the whole state,” he said. “When all the copper is taken out, the house basically becomes a knock-down. It then has a depressing impact on property values.”
He said authorities in Hazel Park, a city in his district, ran a clandestine sting operation on a metal trader. “They saw a guy literally walking down the street with bundles of wire in each hand. They saw him walk into a scrap yard and walk out having sold this scrap he had obviously stolen,” he said.
Several scrap traders contacted by Reuters said they had measures in place to identify metals stolen from homes.
“If somebody looks suspicious we don’t buy the material,” said Marc Kaplan, one of the largest scrap metals traders in New Jersey. He said scrap copper sells for about $3.50 a pound -- against 70 cents just three years ago.
He and other scrap traders estimate that more than 80 percent of recycled copper is exported to China and India.
Warren Gelman, president of merchant broker Kataman Metals Inc in St Louis, Missouri, said illegal trade is just a small fraction of the scrap metals business.
He notes that the Institute of Scrap Recycling Industries, an industry body, sends frequent alerts to all scrap traders on metal thefts in an attempt to stop illegal deals.
“If local law enforcement has a theft, they report it to us and we then turn around and package it for our members in the region,” said the institute’s spokesman, Bruce Savage.
“This problem has been gathering a certain amount of momentum over the last year as you’ve seen commodity prices spike up to record highs at the same time you’ve got an economy that’s teetering domestically,” he said.
But real-estate brokers say more needs to be done to stave off further damage to areas hit hard by waves of foreclosures.
“It’s happening in too many places throughout the country for people to be saying that they are policing who they are getting it from,” said Bill Collins, president of the New Jersey chapter of the National Association of Real Estate Brokers.
Reporting by Jason Szep; Editing by Eddie Evans