Cleveland Real Estate News

The PeeDee article by Thomas Ott (on his blog really) calls our foreclosure issues Cleveland’s version of Hurricane Katrina. It’s not the same in my opinion because the only thing residents of New Orleans did was live in a city that got flooded out. But either way, he does mention some interesting statistics:

“….Nearly 24,000 people have lost their homes to Cleveland’s Katrina. Nearly 10,000 of the city’s houses have been abandoned….

In St. Bernard Parish, a working-class suburb of New Orleans, the real Katrina destroyed about 13,700 houses, displacing some 35,000 people. …”

The article points out that 6,000 Katrina victims have recieved aid/new homes and government assistance, while we do not have that assistance here. He mentions we did not have good samaritans’ helping us roll up our sleeves to  solve the problem.

I agree with some of what he writes and disagree with some other points. For example, non-profits qualify as ‘good samaritans’ to me, groups like Neighborhood Housing Services of Greater Cleveland.  And that is only one, there are many more.  There are banks who have frozen the ARM resets, there are banks who have refinanced homes to lower payments. There are mortgage lenders doing pro bono work to intervene and try to help those who call (and you have to call!) avoid foreclosure.

Are there culprits? Yes. Let’s name a few: the easy money lending programs; the predators (pseudo lenders, appraisers and title people) who took advantage of people and had fine print that did not state the truth. But there are other factors at work. People wanted to own a home even when they could not afford it and they got in above their means and over their heads. There is no government or lending entity responsible, it’s a personal financial responsibility that was lacking.

People jacked up debt on credit cards and then could not pay them but still managed to buy a home that they could not afford. Sometimes I think the zero down programs, without proper education beforehand, just tell people that it’s okay, you won’t have a financial stake in this so you can walk away if things get tough. This affected the individuals who did this and it wound up affecting us all, as a City.

It’s also the economy stupid (to borrow from prior campaign slogans).  The job situation got worse for many who experienced layoffs. And our ability as a City to bring in more jobs than we lose is still lacking.

Yeah it’s also Wall Street and some out of area banks that just didn’t even have Cleveland on the radar until they could come in and prey on those of us who wanted the American Dream without the money to back it up. And as Thomas Ott so rightfully points out, Cleveland laws were struck down by the Supreme Court that would have helped protect against some of these awful loans - and the Ohio Consumer Protection law on the books protects your $30 appliance purchase but not your $100,000 home purchase. So when the law was struck down by Ohio Supreme Court, where were our legislators to pick up the slack and write a better one? That is something I’d like answered.

The Pee Dee will be doing more stories on this over the next few days so be sure to read.  Peace Out - 3C

Update: an example of NHSGC being one of the helpful samaritans; from their site, 7,000 people have called for help from them to avoid foreclosure.

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