Cleveland Foreclosures

All Boarded Up - How Cleveland is Dealing With Mass Foreclosure - NYTimes.com — draw your own conclusions, though you might be able to pick from this grab-bag: government is ineffective, government is effective, the economy is on the upswing, the economy is on the downswing, home ownership is great, homeownership is terrible. Etcetera. An interesting quote (emphasis mine):

In other instances, mortgage brokers would cruise neighborhoods, looking for houses with old windows or a leaning porch, something that needed fixing. They would then offer to arrange financing to pay for repairs. Many of those deals were too good to be true, and interest rates ballooned after a short period of low payments. Suddenly burdened with debt, people began to lose homes they had owned free and clear.

And one more good quote about the insanity of recent home valuation:

The two-story house has a long rap sheet of bad deals. Since 2001, it has been foreclosed twice and sold four times, for prices ranging from $87,000 to $1,500. Jimenez bought it for $4,000.

Yes, you read that correctly. $4000.

Banks are now selling properties at such low prices — many below what they sold for in the 1920s — you have to wonder why they bother to foreclose at all. (The F.D.I.C. estimates that each foreclosure costs a bank on average $50,000, more than if they were to do a loan modification.)

2 comments left



I read the whole article and found it incredibly eye-opening. Cleveland is in a sad state of affairs and I wonder how it will all turn out.

Alexander Micek

Sweet! I love it when people read the entire links… I mean the crap I link can get really looong. Anyhow, the valuation of homes is manic depressive, and these neighborhoods are just suffering as a result. We’ve got to get the wealth redistributed if we are to avoid seeing the majority of communities fall into disrepair. Though, I’m sure it isn’t that simple.

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