Just bumping this back up to the top, to note a new news item on this subject: Wells Fargo, BofA, others sued by city of Cleveland over foreclosures. Quote:
“To me, this is no different than organized crime or drugs,” Cleveland Mayor Frank Jackson told the Cleveland Plain Dealer.
Original post is below the flip.
A pointer (via Calculated Risk) to a story that could be of local interest… Part of the problem of the rising defaults on mortgage payments — aside from people losing their homes — is that America’s debt-financed financial system has become so haphazardly and negligently administered (all in the pursuit of illusory “growth,” as opposed to sustainable growth). And when homeowners default on their subprime mortgages, it turns out that nobody is willing to take responsibility for these abandoned properties.
This BusinessWeek story concerns such a case that happened in urban Buffalo, and how a local prosecutor is dragging the banks to court to force them to accountability for the derelict properties. This isn’t unique to Buffalo; I recall reading a story about an Ohio judge who ruled that Deutsche Bank had to own up to being the “real” holder of the lien on a foreclosed property, and it caused a bit of a stir among the economic bloggerati.
Where the upstate NY angle is concerned, a commenter in one of the Calculated Risk threads wondered if other upstate cities were dealing with this in a similar manner. I don’t know the history of such lawsuits in the Syracuse area. But I admit I like the get-tough, take-charge aspect of this particular story. And it’s not just a depressed-upstate-city problem: it’s happening to cities and towns all over America right now. Maybe depressed Rust Belt areas can lead the way on this.
The thing to remember here is that blight doesn’t just magically happen. Blight is always the result of something that’s profitable for someone. I guess the banks don’t want citizens to realize this, and to continue believing it’s all continuing to happen just because their cities are inherently worthless.