Tag Archives: foreclosures

Cleveland Takes its Fight Against Wall Street to the Supreme Court

We’ve previously written about Cleveland’s lawsuit against 21 big banks over the mess that was created by the foreclosure crisis.

This article in Cleveland Scene summarizes the case nicely:

“The case against the banks isn’t a class action about individual homeowner losses, or whether they were tricked into signing commitments they couldn’t keep. (Attorney Joshua) Cohen knows that’s a common misunderstanding. Instead, it’s about the big picture from the city’s point of view — an attempt to recover money Cleveland has been forced to spend cleaning up the mess Wall Street left behind.

The foreclosed homes often end up as abandoned, ugly board-ups that are a haven for crime. The city is left to mow the grass when neighbors complain about rodents. The police end up dealing with festering drug problems. All of that costs money. And ultimately, the city must demolish thousands of these derelict properties at a cost of $7,000 each or more. But Cleveland is not alone: A similar case filed by the City of Buffalo, New York, claims the maintenance, police attention, and eventual demolition of foreclosed homes totaled as much as $16,000 per building. Of course, Buffalo was left holding the tab.

‘Was it irresponsible lenders or borrowers?’ Cohen asks rhetorically. ‘You could argue that until the cows come home. But whatever conclusion you reach, Cleveland was an innocent bystander. It’s amazing to me that the financiers have not been called to answer for this in any meaningful way.'”

Where does the case, filed in 2008, stand now?

Headed for a long-shot run at the US Supreme Court.

In addition to Cleveland, similar suits have been filed by Buffalo, Cincinnati, Baltimore and Memphis, the article states.

-KG

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Filed under Editorial, Real Estate, The Housing Crisis

Cleveland Lawsuit Thrown Out

A federal judge has thrown out the city of Cleveland’s lawsuit against a number of large banks that the city believes contributed to the crisis in foreclosures.

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The city is appealing, according to this Plain Dealer blog post.

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Saving Cleveland’s neighborhoods

Quite a bit has been written by the national media about how the foreclosure crisis has impacted Cleveland. Many of the stories focus on the Slavic Village neighborhood, as does this one.

This article from Sunday’s New York Times Magazine is one of the best, as far as I’m concerned.

It explains the second wave that is now hitting the city – investors who buy foreclosed properties for next to nothing and try to flip them

“Now outside investors have descended on Cleveland; they pick up properties for the price of a large flat-screen TV and then try to sell them for a profit.”

It also describes how entire neighborhoods are being destroyed.

“In the ensuing years, the city’s real estate was transformed into an Alice-in-Wonderland-like landscape. Local officials began keeping track of foreclosed homes by placing red dots on large wall maps. Some corners of the map, like Slavic Village, are now so packed with red dots they look like puddles of blood. The first question outsiders now ask is, Where has everyone gone?”

Author Alex Kotlowitz is well known for his great journalism on urban issues. He is the author of “There Are No Children Here,” a book about two young boys growing up in a Chicago housing project, as well as a number of other books and articles.

This story is on the long side, but well worth the read for anyone who wants to know how this issue could impact them and their home, and what the city is trying to do about this enormous problem.

I was able to read this online, but my friend had a hard time, I’m hoping this link will work.

http://www.nytimes.com/2009/03/08/magazine/08Foreclosure-t.html?_r=2&pagewanted=2&emc=eta1

-KG

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