The Historic Loss Of Industry And The Effects Of The Foreclosure Crisis

1516 Words7 Pages
Problem statement The historic loss of industry and the effects of the foreclosure crisis have left Cleveland 's Population dwindling to about 400,000 people with an aging housing stock that was built for more than a million. The city estimates that as many as 15,000 houses are vacant more than half are condemned and awaiting demolition. Weak housing markets in Cleveland caused a regional housing problem. We face a regional economic growth problem that stems in part from long-term population loss. When cities shrink, the housing stock remains intact, like a ghost of better times. With fewer people seeking homes, we usually see the prices of homes decline. Cuyahoga County’s land bank is aggressively reducing our supply of low-value…show more content…
entered a deep recession, leading to unprecedented levels of mortgage delinquencies, defaults, and foreclosures. The roots of this housing crisis lay in a combination of factors, including the following: Federal policies in the 1980s and 1990s deregulating mortgage lenders; a growing flow of capital into real estate in an era of low interest rates and the widespread use of refinancing by homeowners a shift in mortgage lending from federally-regulated banks and savings and loans to mortgage firms not subject to federal regulation, which aggressively promoted “subprime” loans to risky borrowers; The federal promotion of home ownership for lower-income and minority households by both the Bill Clinton and George W. Bush administrations borrowing by homebuyers who did or should have known that they could not afford to repay subprime mortgage loans, as well as speculative purchasing by “flippers” looking to resell for a quick profit The financial problems experienced by homeowners who lost their jobs in the recession or Whose other financial problems (e.g. due to medical expenses) made it impossible to maintain their mortgage payments; - “predatory” lending practices (e.g., mortgages with costly conditions and exorbitant fees) and outright fraud (e.g., “liar” loans in which the buyer’s income was fraudulent and home appraisals far above real market value). Effect of problem: The
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