Cleveland Foreclosures: City Giving Land Away — The Reality of Foreclosure and What It’s Going to Take to Stop the Crisis from Getting Worse

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This past Sunday, the CBS news magazine show, 60 Minutes, showed how it affects you when your neighbor goes into foreclosure. The show also detailed what it’s really going to take to solve the problem.

The show focused on foreclosures in Cleveland, which is tearing down houses (yes, tearing them down!), in order to preserve surrounding home values. And, in many cases, the city is giving the land that these properties used to sit on to neighbors who turn them into gardens and green spaces, which help to sustain property values.

Cleveland Foreclosures: Why the City is Tearing Down Houses and Giving Away Land

When a home sits vacant because it’s been foreclosed on and the owners have moved out and/or been evicted, thieves come in. This leads to vandalism and other crimes. So, Cleveland has started to tear down homes — more than 1,000 of them already with 20,000 more scheduled for demolition — and give the vacant lots to homeowners who live next door for example. This stabilizes property values because instead of having an empty house that invites crime sitting there, you then have a nice green space which can be turned into an attractive garden orother green space.

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How to Stop Foreclosures in Cleveland: What Lenders Can Do

One thing the City Treasurer in the piece pointed out was that about the only thing that can stop more foreclosures — and greater damage from being done to neighborhoods in Cleveland (and indeed, around the country) — is for banks to write down principal balances on home loans.

This would stem the tide of foreclosures and stop many from resorting to voluntary foreclosure (eg, purposely walking away from a home even when the homeowner can afford to pay, but chooses not to because the value of the property has dropped so much).

As this government official so eloquently put it (and I paraphrase), “They [banks] hand a hand in causing this crisis; this is one way they can help clean it up.” See video below for full story.

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Home Foreclosure News of the Day: 15% More Americans Willing to Voluntarily Walk Away from Their Homes

Foreclosure Advice: Should You Continue to Pay Your Mortgage While You Wait for a Home Loan Modification?

Can You Legally Take Ownership of a Foreclosure Property That Has Been Abandoned via Squatter’s Rights?

Foreclosure Cleanup Money: HUD Ponies Up Another $1 Billion to Help Clean Up, Clear Out and Rehab Foreclosed Properties

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

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