New tools are coming into play across the country and in Ohio that discourage banks from walking away from abandoned, underwater properties
San Francisco, CA -- (SBWIRE) -- 10/15/2013 -- In a study released recently by the Thriving Communities Institute, Frank Ford, senior policy advisor writes, “Foreclosure filings are down substantially” throughout Cuyahoga County. The study tracked vacant property and foreclosure trends between 1995 and Aug. 31, 2013. Foreclosure filings can destroy a neighborhood’s property values and in worse case scenarios leads to board-ups that bedevil Cleveland neighborhoods as well as teardowns and rebuilds. At this rate of decline, Ford estimates, by the end of 2013 we could see the fewest number of foreclosure filings in almost ten years. “We’re looking at about 7,500 today,” says Ford. “That’s down from about 13,000 in 2007, but it’s more than double the 3,000 we had in 1995.”
The Cleveland, Ohio study echoed the findings of two researchers at the Federal Reserve Bank of Cleveland. The researchers issued an encouraging report earlier this week on the housing market recovery nationally. Reserve Bank researchers found, “that the proportion of mortgages in default … has dropped sharply in recent years. The fraction of mortgages entering the foreclosure process has also been declining.” Yet warned, “there are still many homes working their way through the foreclosure process.” These pending foreclosures may continue to hamper recovery but offer a period to perfect policy responses such as keeping people in their homes and tools to discourage banks from walking away from underwater properties.
Earlier this year, Youngstown, Ohio officials passed a city ordinance that discourages walk aways that lead to board-ups and deteriorating property values. Lenders are now required to post a $10,000 bond if they foreclose on an abandoned and vacant property. The money will be used to bring condemned property back into compliance, or for demolition. “Our rate of compliance is 82 percent or higher,” said Youngstown spokesperson, Maureen O’Neil. “We mean business.”
Ford agrees with the preventive measure stating, “Vacant and blighted properties are still at record high levels and present a major threat to the real estate market in Cuyahoga County.” The region must focus on recovery, Ford reiterates, streets and neighborhoods blighted by empty homes must be sustained through demolition or renovation and new construction.
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