Cleveland Has Been the Epicentre of Foreclosures
February 2nd, 2009
Cleveland has been the epicentre of foreclosures for many reasons – the prime one being the collapse of the economy of the Rust Belt that led to massive unemployment. Also there was a fall in population. But some critics are not willing to totally buy this argument. They put the blame squarely on bad governance and unbridled greed. This has made Cleveland one of the notorious foreclosure capitals of USA.
Cleveland is in Cuyahoga County. Jim Rokakis devotes a lot of time trying to find an answer to the foreclosure crisis in Cleveland. A map of the city is dotted with red spots marking the repossessed houses. If the map is held at a distance some areas look blurred crimson pointing to the intense concentration of foreclosure. By summer 20007 Cleveland had four of the twenty-one top foreclosure-offending zip codes of the country. The highest was in zip 44105 – Slavic Village.
The ferocity of the foreclosure attack in Cleveland cannot be explained merely by referring to adverse economic conditions. It was true that the job losses here was three times more than the national rate and also true that from 2001 there has been no noticeable recovery in this region. In 2001 Ohio contributed to a quarter of all the job losses in the entire country. But even then these are not the only reasons behind this massive landslide of foreclosures. Even when the economy was fine, the number of foreclosures had started to increase said Rokakis.
At the root of the problem was bad governance and excessive greed. As early as 2002 the city had tried to pass anti-predatory ordinances but the national banks offered stiff resistance. If the ordinances had been passed then the local lending standards would have been far above the national standards. The lenders did not want this. The bank lobby got the ordinances nullified and it became a Wild-West of predatory lending with no checks. By the time the anti-predatory law was passed in 2006 the damage had gone out of control. The latest step has been a compact drafted by the Governor and the Attorney General of the State. It states that those who created the lending crisis should now take part in a measure that would help the victims continue to stay in the houses that are their homes. The approach has been rather mild and consequently the effect too has been pale.
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July 27th, 2009 at 7:28 am
[...] unemployment rises to a new high. With joblessness mounting, people are unable to make their mortgage payments, as a result of which foreclosures have become very common. Now the Obama administration [...]