City of Cleveland sues sub-prime mortgage lenders for negligence
The City of Cleveland is suing 21 mortgage lenders for damages that they claim to have incurred as a result of the U.S. sub-prime mortgage fallout. Cleveland Mayor Frank Jackson compares the resulting chaos to “organized crime activity on neighborhoods, cities and individual lives, sucking equity out” and says that city has been devastated by the negligence of lenders who signed off on deals they know they shouldn’t have made.
Cleveland, one of America’s poorest urban areas has seen over 7,000 foreclosures through both 2006 and 2007. In some areas of the city entire blocks of houses are abandoned, boarded up, and stripped of anything valuable. Most often, they ultimately meet a wrecking ball at the tax payer’s expense.
The City is claiming hundreds of millions in damages which result from lost tax revenue, the cost of demolished abandoned homes and the added cost of policing neighbourhoods which have become dangerous due to high rates of abandonment.
Mayor Jackson says, “We have to hold accountable those who are responsible.”
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Norm Fisher
Royal LePage Saskatoon Real Estate
2 comments so far. We'd love to hear your thoughts.
May 21st, 2009 at 12:00 PM
It’s so sad we have abandon homes in this country and homeless everywhere.
Does anybody else see a solution. The goverment could step in set these areas up for people to come and get shelter and learn skills and get a job and have a low income apartment.
They could also be used in natural disasters for temporary housing to get people though the same process.
May 21st, 2009 at 12:00 PM
Very interesting. Need someone to blame…..there’s lots of factors involved. Ultimately, if you allow a completely unregulated free market, well, it will correct eventually, but there’s pain on both ends of the scale.
I wondered about Saskatoon, or Saskatchewan in general, setting up a residency housing program. That being – if you want to own in SK you pay tax in SK. Residents only, please. In my old home town (BC) most of it is a craphole because of forein investors. Lots of landlords who don’t give a crap what the place or city looks like, since they are not there. The people that live there suffer for it as well as the city as a whole. They still get their money from the property tax, but the city improvement is greatly impeded by foreign owners who dont care about the city itself.
I have no idea how you could regulate such a situation, but there are rules and regs for owning property in other countries, so why not provincial rules? At least landlords that live in Saskatoon keep wealth in the area and have some vested interest in the city itself.
Just a thought!