facing the foreclosure crisis in greater cleveland: what happened and how communities are responding

8/9/2019 Facing the Foreclosure Crisis in Greater Cleveland: What Happened and How Communities are Responding

1/32

facingtheforeclosurecrisis

ingreatercleveland:

What happened and how communities are responding


2/32

This report was produced by the Federal Reserve Bank of Cleveland.

Te views expressed herein are those o the individual authors; they do not necessarily

refect those o the Federal Reserve Bank o Cleveland or the Federal Reserve System.


3/32

The oreclosure crisis is among the most signicant challengesacing American cities today. It has been dicult as a nation to

assess the damage to housing stock, neighborhoods, and communi-

ties, let alone decide upon strategies to repair and move orward.

As new oreclosures continue to mount, their impact spreads rom

central cities to places that initially seemed immune. Indeed, we

use the term oreclosure crisis broadly in this report, including the

subprime lending meltdown, oreclosures themselves, and spillover

eects such as vacant and abandoned properties as elements o this

crisis. In the midst o any crisis, it can be dicult to step back, take

stock, and begin to mitigate the damage. But leaders in Northeast

Ohio have done just that, acting quickly to develop and launch initia-

tives, both innovative and collaborative, in Cleveland and CuyahogaCounty to address the crisis. Cuyahoga County may be the epicenter

o the oreclosure crisis, but it is also nationally recognized as a place

aggressively working on many ronts to make its way orward.

Using data that track properties rom loan origination through ore-

closure, REO, and disposition, this report documents the unolding

o the oreclosure crisis in Northeast Ohio and the enormous toll

to date. The report also documents some o the multi-aceted local

responses. Sidebars contain stories o community leaders, organiza-

tions, and agencies that have come together to begin repairing the

damage and prevent properties rom urther demise.

Cleveland is an opportune subject or study or three reasons. One,the crisis emerged here early and with starkly visible impact. Indeed,

media attention rom around the world has ocused on Clevelandin

particular the Slavic Village neighborhood that has been devastated

by predatory lending, oreclosures, and vandalism. Two, Clevelands

strong community development organizations were well organized

and ready to respond promptly to the crisis. Having weathered the

loss o jobs and exodus o people to the suburbs, Cleveland had

already begun tackling the challenges o vacant housing and a

shrinking city. It was one o the rst sites in the nation to work with

the National Vacant Properties Campaign, creating a blueprint or

strategically addressing neighborhood revitalization. And three, local

researchers, building on their longstanding involvement in housing

and neighborhood studies, were well positioned to do timely research

on the dynamics o the problem and to document the array o

responses. Their research, in act, orms the basis o this report.

The problems o weak-market citiesthose that ell behind in

economic and population growth, suered a resulting over-supply o

housing, and are now among the hardest hit by this crisismay seem

intractable. Yet our chronicling o what happened in the Clevelandarea suggests that the latest blow to these vulnerable communities

was not inevitable. We show, or example, that a huge expansion o

subprime credit took place in communities that previously had very

little access to credit. These subprime loans oreclosed at a much

higher rate and triggered an avalanche o vacant properties, many

o which have been abandoned by lenders or sold to speculators at

extremely distressed prices.

Despite the severity o the problem here, Clevelanders have exhibited

a strength and willul perseverance, exemplied by the citys multi-

aceted, coordinated, and extensive response to the crisis. Journalist

Alex Kotlowitz visited several hard-hit cities across the country beore

deciding to write about the devastation in the Slavic Village neigh-

borhood o Cleveland. (His article All Boarded Up was published

in the New York Times Magazine on March 8, 2009.) Kotlowitz

returned to Cleveland in June 2009 to participate in a orum on the

oreclosure crisis. At this event he explained why he chose Cleveland

to prole: It was the one place in the country where I saw people

pushing back.

This report is Clevelands story. The outcomes are uncertain and the

path ahead is still very dicult. We eel there is decided value insharing our story now, while the crisis is still playing out. The value

lies in what Clevelands example can contribute to other communi-

ties eorts to deal with oreclosures and their atermath. We also

hope that our story can urther policy discussion about what will be

needed in the uture to avert another such crisis.

We are grateul to have partnered with the Federal Reserve Bank o

Cleveland to produce this report. I crisis indeed breeds opportunity,

now is an ideal time to build knowledge about collaborative strate-

gies, policies, and programs that contribute to sustainability or

metropolitan areas.June 2010

Youve seen things, youve heard things,

and youve elt things that most o us havent,

journalist Alex Kotlowitz pointed out.

It is incumbent on you to share [that] with the

rest o the country. In your hands is not the uture

o one house or one block or even one city.

You need to be the guides. I urge you to give voice

to what youve seen.

Letter rom Claudia Coulton

and Kathy Hexter

Kathryn Wertheim Hexter, let, rom Cleveland State University and

Claudia J. Coulton, PhD, rom Case Western Reserve University


4/32

Much has been written about the oreclosure crisis in Northeast Ohio. With a our-old increase in oreclosures

rom 1995 to 2007 and entire neighborhoods decimated by vacant and abandoned homes, Cuyahoga County

one o the epicenters o the nations oreclosure crisishas served as a striking example o the devastation

wrought by the mortgage lending meltdown. Existing research largely ocuses on distinct components o the

problem during a specifc time period. Absent rom much o the research published on oreclosures in this region

are the local responsessome traditional, others highly innovativeto the crisis. This defcit has let unanswered

the ollowing key questions: What are community groups and local governments doing to address the crisis and

its spillover eects, among them a glut o vacant and abandoned homes? And what is being done to prevent a

uture occurrence o similar magnitude?1

This report attempts to articulate two things. One, it spells out what happened here, relating the symptoms and

progressive stages o the crisis as it played out across the regionrom bad loans to deaults and oreclosures,

and then beyond oreclosurebased on research by the Center on Urban Poverty and Community Development

at Case Western Reserve University.And two, it points to representative examples o programs developed and

implemented locally to address particular aspects o the crisis, drawing rom multiple reports by the Levin College

o Urban Aairs at Cleveland State University and local organizations.2

Like the rest o the nation, Northeast Ohio is still very much in the midst o the crisis. It may well be years beore

this region emerges rom its massive tangle. However, in sharing the story now o what happened here, along with

specifc strategies employed to address the crisis at dierent stages, we may provide cities experiencing similar

problems with ideas or tackling them in their regions.

2


5/32

To establish some context or what happened here in Northeast

Ohio, it is worth considering that the regions housing market never

ully recovered rom the previous recession. The region overall has

endured decades o sprawl, declining population in its central

cities, racially segregated neighborhoods, and persistent poverty in some areas. The cycle o credit expansion

boombust nevertheless did take place under these conditions as subprime credit became available in lower-

income communities, while home prices remained airly stable. So while the region participated ully in the lendingboom, it was mainly a bystander to the housing boom.

Typically, housing markets experience a low level o mortgage delinquencies, oreclosures, vacancies, and abandoned

properties. Most markets also have mechanisms that transer those properties to another owner or to an alterna-

tive use, so that ewer abandoned and nuisance properties are let outstanding. For example, lenders modiy loans,

builders reduce housing starts, and money-losing lenders are acquired or shut down. The inverted-pyramid graphic

below illustrates this process. In addition, community groups help acilitate counseling, demolition, and other eorts.

Cleveland is no exception; the city is known or its strong and longstanding network o community development organi-

zations. Since the recent disruption to the housing market occurred at such a massive scale, however, those standard

mechanisms have not been able to keep up with the infow o impaired loans and vacant properties.

When the fow o properties rom one stage into the next increases at a aster rate than the cycle can accommo-

date, exit mechanisms weaken and spillover eects eed back into the top o the pyramid, causing it to becomebottom-heavy. This exacerbates the cycle o disruption and prevents the market rom recovery. The volume o

delinquent loans, oreclosures, and vacant, abandoned, and real-estate-owned (REO) properties in Northeast Ohio

markets quickly overwhelmed the regions existing resources, creating a crisis situation or many communities.

As the crisis hit Northeast Ohio, community organizations increased their eorts and came up with new ways to

respond. In addition, government ocials initiated public intervention on a number o levels to help contain the

eects. Collaborative programs involving city government, local CDCs, unders, and residents have been revitalizing

areas o Cleveland once replete with vacant and abandoned properties.

Such programs underscore the tremendous value o partnerships in helping to revitalize local communities. These

and other strategies or addressing the e ects o the oreclosure crisis continue to be developed and implemented

at the local, regional, and state levels (see sidebars throughout report).

3

Housing Market Cycles

and Typical Responses

Adapted in part from the Cleveland Federal Reserve Banks 2008 Annual Report essay, Breaking the Housing

Crisis Cycle, published May 2009.

Delinquency

Default

Foreclosure

Vacant

REO

Vacant

Abandoned

Nuisance

Counseling, oreclosure prevention, loss

mitigation programs

Supply and demand adjustments

Sale/purchase assistance programs

Land banks

Rehabilitation (private, nonprots)

Demolition

Pyramid illustrates the ow o properties rom one stage to the next.

Dotted edge indicates a higher inter-stage ow in times o duress.


6/32

Making Data AccessibleGood data are hard to come by. Good thing or researchers and

practitioners in Northeast Ohio, then, that NEO CANDO exists. Simply

put, NEO CANDOit stands or Northeast Ohio Community and

Neighborhood Data or Organizingis a web-based neighborhood data

inormation system that makes comprehensive local data available

to anyone (http://neocando.case.edu ). Hosted by the Center on

Urban Poverty and Community Development at Case Western Reserve

University, NEO CANDO secures and assimilates public data rom

many dierent governmental departments. The data are then easily

accessible in a single location. Features include social and economicdata (crime counts, poverty rates, birth rates, etc.), property data

(property transers, oreclosure lings, sheris sales, mortgages,

etc.), and a mapping unction. Most data are available or a range o

geographic areas, including census tract and block-level boundaries,

as well as locally dened areas like neighborhoods, political wards,

and city-planning districts.

The data are updated regularly, which allows or the identication

and examination o trends in current and developing issues. Users

can make charts and maps. Theres even a web-based tutorial to

instruct new users. And its not just easy to access; NEO CANDO

data provide the basis or meaningul academic and policy research,

as well as community groups targeted eorts to stem oreclosures

and stabilize neighborhoods.

NEO CANDO data has been a critical component o many on-

the-ground eorts to combat the oreclosure crisis. For example,

community practitioners use data rom the system to create lists o

homes that are likely to be oreclosed on, and then direct oreclosure-

prevention outreach to these at-risk homeowners. Practitioners have

also used inormation rom NEO CANDO to estimate which oreclo-

sure lings are on rental properties and then orewarn those proper-

ties current renters. In similar ashion, Cuyahoga County ocialstook advantage o NEO CANDO data and technical assistance when

planning local oreclosure counseling events, strategically locating

these events in venues accessible to the largest number o distressed

borrowers.

Rationale: Why the Focus on Northeast Ohio?

Te sory o how he oreclosure crisis unolded in NorheasOhio is unique. Te crisis hi an already weakened region hard.For years leading up o he curren crisis, Norheas Ohio,similar o many weak markes, had seen declining populaion inis cenral ciies, increasing sprawl, and rising vacancy raes insome neighborhoods. Unlike in he naions sronger markesFlorida and Caliornia, or example, which saw credi expand-

ing o he middle-income suburbsNorheas Ohio, home oCuyahoga Couny and he Ciy o Cleveland, experienced hesubprime credi expansion largely in low- and moderae-incomecommuniies ha had had litle access o credi in he pas (Mianand Su 2008). Te region also did no see housing pricesincrease dramaically, in conras o many o he naions srongermarkes. Ta means, among oher hings, ha borrowers didno have he abiliy o renance ou o loans whose paymenshey could no keep up wih.

Also unique is he ac ha he crisis became apparen earlierin he Cleveland region han in sronger markes. Foreclosures

here doubled beween 1995 and 2001 and hen doubled againby 2007 (see gure 1). As early as he lae 1990s leaders in hearea were voicing concerns over subprime lending, which heyhough o be responsible or he increase in oreclosure lings,especially in communiies where housing values were low.

In he aermah o a susained surge o oreclosures, many ohe regions communiies have coninued o grapple wih scoreso vacan and abandoned properies, dwindling ax bases, anddecreased propery values. Foreclosure lings, o course, are onlyone sympom o he morgage crisis. Concenraions o oreclosed

homes have led o a greaer level o devasaion or cerain areasin he couny, and in some Cleveland neighborhoods in paricu-lar. Consider ha as o Augus 2009, Cleveland had more homesslaed or demoliion han wice he ciys enire allomen oNeighborhood Sabilizaion Program unds could cover.

On he plus side, Cleveland is also highly regarded or is srongnework o communiy-based organizaions. Tese eniies,along wih local governmen, have long been engaged in daa-

driven approaches o local problems and issues, wih criicalaccess o daa provided by a unique inegraed propery inormaion sysem, NEO CANDO (see Making Daa Accessible). Inac, Cleveland was one o he rs sies in he naion reachingou o and apping he experise o he Naional Vacan Proper-ies Campaign o address he problem o vacan properies (seeVacan and Abandoned Properies Acion Council) (Mallach,Levy, and Schilling 2005). Ciy ocials and leaders rom acrosshe counry have been in ouch wih local CDCs and researcherso learn wha approaches Cleveland has developed in addressingdieren aces o he problem, and which show promise.

Examining how he crisis played ou in Norheas Ohio isimporan because he naional sory does no refec wha hap-pened here. As noed above, dierences exis in how he crisisaeced weak versus srong markes. Tese dierences havesignican implicaions or policymakers, because approachesdeveloped or one region may no be suiable or ohers.

Tis repor is organized o refec disinc sages o he oreclo-sure crisis and beyond: sage one, rom a loan originaion o aoreclosure ling; sage wo, rom a oreclosure ling o a ore-closure sale and EO; and sage hree, ou o EO and beyond.

4

Our work is about democratizing data or neighborhood change

says Michael Schramm, NEO CANDOs chief programmer.

We aim to make the data straightorward, understandable,

and easily available to the public.


7/32

NumberofForeclosuresFiled

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Figure 1. Foreclosure Filings in Cuyahoga County, 1995-2009

Along he way we highligh a number o approaches developed bylocal CDCs, nonpro organizaions, unders, and governmeno help communiies deal wih properies a each sage. Teseprograms represen a range o soluions developed in response oNorheas Ohios oreclosure crisis; given he wide array o acivi-ies in he Cleveland region, we could no cover all in his repor.

Stage I: Te Road to Foreclosure

Wih Norheas Ohios economic condiions sill weakened in heearly 2000s, several acors helped uel he regions smolderingoreclosure problem. As gure 1 below illusraes, he number ooreclosure lings in Cuyahoga Couny more han quadrupled

beween 1995 and 2007 (Schiller and Hirsh 2008).

And his our-old increase in lings hi some communiies harderhan ohers. Te map below shows oreclosure lings as a percen oall residenial properies in a given census rac. Te daa reveal haone-h o all census racs in Cuyahoga Couny have seen as manyas 21 o 50 percen o heir properies ouched by oreclosure.3

Early on, communiy leaders and local researchers suspecedsubprime lending o being a acor in he areas soaring oreclo-sure raes (Lind 2008). Tere was no reprieve rom eiher any

ime soon. Te coninuing downward slide o housing pricesand ineres rae reses on subprime loans4 every couple o yearsmean ha oreclosures would coninue heir precipious climb(Schloemer e al. 2006).

Figure 2. Percent o Unduplicated Residential Mortgage Foreclosure Filings

(Cleveland and Cuyahoga County, Jan 1, 2006Oct 15, 2009)

Source: Policy Maters Ohio, 2009

Source: Cuyahoga Couny Clerk o Cours, accessedom NEO CANDO (htp://neocando.case.edu).

0 4 8 Miles

0.0-3.0

3.1-6.0

6.1-13.0

13.1-21.0

21.1-50.0

City/NeighborhoodCleveland boundary

Percent foreclosure (by tract)

5


8/32

Vacant and Abandoned Properties Action Council

In 2004, Cleveland became one o the rst sites to engage the services o the National Vacant

Properties Campaign, a national partnership among Smart Growth America, Local Initiatives Support

Corporation, the Metropolitan Institute at Virginia Tech, and the Genesee Institute that helps local

areas plan and strategize eorts to reclaim and remediate their vacant property. Ater assessing

Clevelands situation, the National Vacant Properties Campaign published a report describing the

problem o vacant and abandoned properties here and made several recommendations or solutions.

(The report is titled Cleveland at the Crossroads: Turning Abandonment into Opportunity.) Prompted

by the campaigns assessment and recommendations, community development corporations, local

city, suburban, and county governments, unders, and local universities came together to create

VAPAC, the Vacant and Abandoned Properties Action Council, to marshal existing local resources to

address the problem o vacant properties in Northeast Ohio.

VAPAC was created to explore solutions to vacant property issues,

share inormation on new challenges and successes, and help coordinate

activities to make efcient use o scarce resources,

says Frank Ford, the groups chair.

VAPAC acilitates communication within and across dierent levels o government, and helps agen-

cies avoid duplicating services. The diversity o the group also ensures oreclosure- and property-related activities are applicable and appropriate both on the ground, working with amilies acing

oreclosure, and on a policy level. In addition to the regular VAPAC meetings, topical working groups

have explored specic issues in greater depth.

Besides ensuring eciency among parties working in the eld and sharing knowledge on related

policy issues, VAPAC has created a code o conduct or owners o REO property, developed guidelines

or municipal CRA agreements, and sponsored a Cuyahoga County-wide code enorcement summit

on oreclosure and vacant property.

6


9/32

A elltale Starting Point

Sudying morgage loans ha wen ino oreclosure rom 2005o early 2009 in Cleveland and Cuyahoga Couny, he CWUresearchers arrived a some compelling conclusions. For one,subprime loans are by ar he mos common saring poin onhe pahway o oreclosure in Cuyahoga Couny. Te researchersalso ound dierences among borrowers o dieren races, bohin he raes o receiving subprime loans and in he raes o ore-

closure. Overall, hey concluded, he road rom loan originaionis ar more likely o lead o oreclosure or minoriy borrowershan or ohers (Coulon e al. 2008).5

Using maching echniques o link HMDA morgage records wihlocally recorded morgage documens and oreclosure lings, heyexamined morgage loans made in Cuyahoga Couny in 2005,2006, and 2007 ha oreclosed beween 2005 and early 2009,considering numerous acors ha could have infuenced whehera loan deauled or no.6 As noed above, heir resuls showed hahe sronges predicorby aro a loan oreclosing is is sausas a subprime loan. In ac, holding oher acors consan, home

purchase loans ha were subprime had an 816 percen higherchance o going ino oreclosure han oher loans (Coulon e al.2008).

Naionally, subprime lending enjoyed sunning growh romhe lae 1990s ino he nex decade, quadrupling is share o hemarke in jus over 10 years. In 1994, subprime loans consiuedless han 5 percen o morgage originaions across he naion;

by 2005 ha proporion had jumped o 20 percen (Gramlich2007). In Cuyahoga Couny, i was even higher, wih 22.9percen o he counys 2005 morgage loans originaed bysubprime lenders (Pleasans and Brown 2007). And in some

Cleveland neighborhoods, subprime loans accouned or asaggering 63 percen o morgage originaions (Nelson 2008).

So why, i hese loans were so risky, were so many o hem beingmade? Along wih greaer risk or borrowers, subprime loans car-ried higher coss, boh in ineres raes and ees, han prime loans.Bu hey also had characerisics ha appealed o borrowers. Forinsance, he loans required litle or no down paymen and ea-ured low inroducory ineres raes, which help borrowers aord

iniial paymens. Tese borrowers may have held an expecaionha eiher heir incomes would rise o cover he higher ineresraes upon rese or ha hey would be able o renance beore hehigher monhly paymens kicked in.

Brokers also ound subprime loans hugely atracive. For one, heyearned higher ees or originaing subprime loans. wo, subprimeloans were an insrumen by which morgage brokers could expandheir business by making credi available o a previously unappedmarke o riskier borrowers. Bu a hird acor was also a work:he expansion o securiizaion. In securiizaion, lenders bundledsubprime loans wih oher less-risky loans ino asse-backed

morgage securiies; hese bundled loans were hen raed and soldon Wall Sree o invesors looking o acquire real esae holdingswihou he risk o purchasing only subprime morgages ourigh(Ergungor 2008). Invesors also ound hese atracive. Inensedemand or morgage-backed securiized loans mean ha no onlymorgage brokers, bu appraisers, raing agencies, and securiiesraders as well could be less rigid in adhering o heir own indusrysandards, since each was essenially exracing a ransacion eeand hen passing along he risk o he nex ineresed pary. Tispassing-he-buck game ended wih he caasrophic implosiono he subprime lending marke in lae 2007 (Cuts and Merrill2008).

7

Figure 3. Estimated Proportion o Home Purchase Loans Still Intact*

SurvivalFunction

1.00

0.90

0.80

0.70

0.60

0.50

0.40

0.30

0.20

0.10

00 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50

Month from Origination

High-cost loan Not high-cost loan

Source: HMDA, Loan Originaion andForeclosure Mached Daa File

* Loans originated are home-purchase loans rom 2005 through 2007 that had not oreclosed by early 2009.


10/32

Higher and Faster to Deault

I sands o reason ha subprime loans will deaul a higherraes han radiional loans, and more quickly, oo. Indeed,subprime loans accouned or 81 percen o all oreclosures rom2005 o 2007 in Cuyahoga Couny. Daa show ha subprimeloans go ino deaul a shor ime aer originaion, wih signi-can numbers occurring early in he second year and as he hird

year begins (see gure 3) (Coulon e al. 2008).

One reasonable approach o avoiding deaul and oreclosure iso sar wih morgage loans ha are more suied o a borrowersabiliy o repay. Tird Federal Savings and Loan in Clevelanddeveloped low-cos lending producs available even o low-income buyers in andem wih a homebuyer educaion program(see Responsible Neighborhood Lending). Te program, calledHome oday, requires atendance a classes beore an individualeven signs a purchase agreemen. Classes are aimed a helpingprospecive homeowners undersand he signican respon-sibiliies, coss, and risks associaed wih owning a home. Teprogram also spells ou he myriad morgage producs available,

helping prospecive buyers make sense o heir opions.

wo oher ndings sood ou in CWUs sudy o morgageloans in Cleveland and Cuyahoga Couny. Firs, he lenders whomade hese subprime loans are predominanly independenmorgage companies, or IMCs. A sudy by he Federal eserveBank o Cleveland has similar ndings. Lending insiuionsregulaed by he Communiy einvesmen Ac (CR) origi-naed very ew o he subprime loans, regardless o borrowerincome. Figure 4 shows he concenraion o subprime morgage

loans made by IMCs per 1,000 unis o housing in CuyahogaCouny. Te map shows he highes concenraion o loans onhe eas side o he ciy o Cleveland, and exending ou o eas-ern suburbs (Nelson 2009).

Te daa ell a dishearening sory: While 223 individual lendersmade and oreclosed on a leas one subprime loan ha wen ooreclosure during he sudy period, he researchers ound haonly a ew originaors accoun or he majoriy o oreclosures

(see gure 5). Tese op 20 lenders originaed 14,412 subprimeloans; 66 percen o all subprime loans originaed in CuyahogaCouny. In addiion, 75 percen o all subprime loans ha endedin oreclosure were originaed by one o hese 20 lenders. ocie one example, Long Beach Morgage, whose loan poro-lio was made up almos enirely o subprime lending (99.34percen), originaed he sevenh-highes number o subprimeloans in Cuyahoga Couny rom 2005 o 2007. O hose loans,65 percen wen ino oreclosure. Long Beach Morgagenowdeunc, like many o is peers in he indusryoperaed ou o

Anaheim, Caliornia (Coulon e al. 2008).

Second, he researchers ound marked dispariies among racesboh in he originaions o subprime loans and in relaed ore-closures. Arican Americans, compared wih whies o similarincome, held subprime loans wo o our imes more oen hanheir whie counerpars, leading o high raes o oreclosureamong his populaion (see gure 6). In ac, he highes income

bracke showed he larges dispariy, wih Arican Americansholding 4.2 imes as many subprime loans as whies.

Figure 4. Concentration o High-Cost Loans Made by Independent Mortgage Companies, 2006

8

No IMC-HC Loans

1-5

6-10

11-15

16-25

26-104

City/Neighborhood

Cleveland boundary

IMC - High cost loans per 1,000housing units

0 4 8 Miles

Source: Home Morgage Disclosure Ac (HMDA)Analysis by Federal Reserve Bank o Cleveland.


11/32

9

Responsible Neighborhood Lending

In 2001, Third Federal Savings and Loan launched its Home Today program, aimed at supporting low-income homeowner-

ship. The comprehensive program eatures homebuyer education, ongoing support, and an overall ocus on sound lending

practices. Inormed decision-making is the crux o the program. Through the Home Today program, homebuyers are

oered a 30-year, xed-rate mortgage at lower-than-average interest rates and a discount on closing costs. But beore any

o that happens, participants in the program take part in homebuyer education classes and receive budgeting counseling.

Beore looking at homes or having a conversation with a lender, the prospective homebuyers are taught what to expect in

buying, nancing, and maintaining a home.

According to its website, Third Federal developed the Home Today program rom a consumers perspective to help you

make inormed choices so you wont eel conused or pressured.

The rst step or potential homebuyers is nding acommunity sponsor to serve as a character reerence.

Next, the prospective buyer receives training on subjects

like budgeting, establishing and maintaining credit, and

shopping or a home mortgage loan. These educational

workshops are done in partnership with (and held at)

local community development corporations throughout

Cleveland. Once an individual completes all required

sessions, he or she is automatically approved or a home

mortgage loan based on income. And Third Federal ser-

vices its own mortgage loans. In act, the bank has never

sold the servicing o a single mortgage in its six decades o doing business. Support provided through the Home Today

programboth pre- and post-purchasehelps ensure success or low-income homeowners. Every homebuyer has a

nancial counselor going through the program, says Martines. That counselor keeps in touch with the buyer and his

or her amily in case they encounter any problems or have any questions or issues.

Since the programs inception in 2001, more than 100 partners have steered some 13,000 potential homebuyers to

Home Today seminars. More than 4,000 have become homeowners.

We operate by a specifc set o values

concern or others, trust, and respect

and by our mission, which is to create value or

our customers and our communities,

says Third Federals Monica Martines.

To do that, we make loans to people who can

become successul homeowners.


12/32

A Contagious Efect

As weve seen happen in ciies across he counry, oreclosuresbege oher oreclosures, in par hrough heir negaive eec onsurrounding propery values (Mikelbank 2008). In Cleveland,his has led o a geographic patern o oreclosureparicularlyon he ciys eas sidein which minoriy neighborhoods have

been more aeced by subprime lending ha led o oreclosure.Figure 7 (page 13) shows subprime oreclosures overlaid on a

map indicaing he percen o Arican American borrowersby census rac. Te racs wih high proporions o AricanAmerican borrowers are also where large numbers o hesesubprime loans have oreclosed. Tis suggess ha hese neigh-

borhoods will ace even greaer challenges in recovering romhe crisis (Coulon e al. 2008).

acial discrimaion in housing and credi has been oulawedor decades. However, he disproporionae impac on minoriygroups o subprime lending has promped calls or legal acion anda search or beter ools o assure more equiable reamen in he

uure. Absen rs-hand esimony and access o sensiive lenderinormaion, a case or racial discriminaion in lending relies ondaa alone. Here in he Cleveland area, he Housing esearchand Advocacy Cener has been documening racial dispariiesin lending since 2004. Unorunaely, insucien speciciy inhe daa hamper eors o ake daa-driven acion. Loan origi-naion specics, such as inormaion abou a borrowers crediscore, balloon paymens, pre-paymen penalies, and erms o

adjusmen, could help assess he qualiy o hese loans and rackperormance going orward. Improving he delivery ime orHMDA daa can also help.

Linking Arms to Fight Foreclosure

In 2005, hen, he region ound isel acing very serious problems.Te seep increase in oreclosure lings mean people were losingheir homes in droves. Te huge volumes overwhelmed he coursysem, o he poin ha i was aking hree o ve years or aoreclosure case o move hrough he cours. Te oreclosures also

Figure 5. Top 20 Originators o Subprime Loans Originated, 2005-07

OriginatorOn HUD

Subprime List%

Subprime Loans

%Subprime Loanswith Foreclosure

Argent Yes 87.34 45.74

New Century Mortgage Yes 95.41 55.37

Wells Fargo Certain subsidiaries 36.16 25.02Countrywide Certain subsidiaries 25.92 22.25

National City Certain subsidiaries 29.00 26.09

Aegis Yes 87.15 47.38

Long Beach Mortgage Yes 99.34 65.22

Option One Mortgage Yes 94.04 43.12

BNC Yes 94.06 46.55

People's Choice Financial Yes 93.52 45.21

Novastar Mortgage Yes 97.96 41.88

Accredited Home Lenders Yes 96.21 34.11

Intervale Mortgage No 87.23 31.95Chase Certain subsidiaries 96.53 16.45

Southstar Funding Yes 84.67 36.77

Indymac Bank No 55.04 32.27

Equifrst Yes 93.24 27.13

Citi Certain subsidiaries 36.04 5.08

Ameriquest Mortgage Yes 71.17 20.58

Aames Funding Yes 92.88 40.67

Source: HMDA, Loan Originaion and Foreclosure Mached Daa File.

10


13/32

spawned a surge o relaed problems, including vacan properiesha were lowering neighboring propery values, atracing vandals,and reducing he ax dollars ha ciy ocials desperaely neededo address hese very problems. A he promping o several subur-

ban mayors and a coaliion o inner-ring suburbs, couny ocialsjoined orces wih leaders o several municipaliies o ake up hegh agains oreclosures, underaking wo disinc eors.

Te rs was a response o he counys criical need o expedie

he oreclosure process. Couny ocials devised an overhaul ohe judicial oreclosure process, including procedural changes hasped up he process and ulimaely cleared a longsanding backlogo oreclosure cases (Weinsein, Hexer, and Schnoke 2006, 2008).

A more ecien oreclosure process has several obvious benes.A working paper published in 2008 by Freddie Mac repors hacoss associaed wih oreclosure rise signicanly wih he lengho he oreclosure imeline. Ideally, he oreclosure procedure

would be jus long enough o avoid he oucomes ha incur highercossvacaing or abandoning he home, allowing he propery oall ino disrepairye allow a homeowner enough ime o bring

he loan curren, i possible (Cuts and Merrill 2008).Te second, more sraegic eor underaken by his collabora-ive o couny and municipal ocials was broader and morear-reaching han sreamlining he oreclosure process. Tissecond eor aciliaed parnerships among area agencies andnonpros o iniiae aciviies, programs, and, where warraned,legal acion specically aimed a prevening urher oreclosures.One such parnership was he Cuyahoga Couny ForeclosurePrevenion Iniiaive, involving 11 couny agencies, nine housing

nonpros, and numerous municipaliies, area lenders, and ohercommuniy advocacy groups.

Coordinaing and implemening he various componens o heiniiaive required signican cooperaion, skill, and resources.Governmen agencies collaboraed across bureaucraic lines oauhoriy. Public and nonpro groups conerred o make sureheir collecive eors were synchronized and minimally overlap-ping, and each o he paricipaing groups demonsraed horizon-

al and verical collaboraion wih each oher and wih he couny.One criical componen o he iniiaive has been Unied Ways2-1-1 Firs Call or Help, a holine ha direcs people o socialservices providers or a variey o needs. Callers acing oreclosureare conneced o paricipaing Norheas Ohio housing counselingagencies ha serve as a vial link beween individual homeownersand heir lenders (see Foreclosure Counseling: Diferen Agencies,

Diferen Approaches). o disressed area homeowners, 2-1-1 andhese housing organizaions are he welcome, comoring voice,ace, and provider o oreclosure-prevenion assisance. As oFebruary 2009, paricipaing agencies had recorded a 53 percen

success rae a avering oreclosure (Hexer and Schnoke 2009).As a drive down some srees in Cleveland reveals, however,oreclosure prevenion eors are no nearly enough. Many,many delinquen morgage loans are unable o be saved, eiherhrough nancial counseling o he homeowner, a modicaiono he loans erms, or oher means. Considering ha oreclosurelings in Cuyahoga Couny have numbered beween 13,000and 15,000 per year or he pas our years, he program can helponly a small percenage o homeowners in disress.

11

Figure 6. Type o Loan and Foreclosure by Race and Income*

* Loans originated are home-purchase loans rom 2005 through 2007; oreclosures observed are through early 2009.

Source: HMDA, Loan Originaion and Foreclosure Mached Daa File.

Black-Low Black-Moderate White-ModerateWhite-Low Black-Middle White-Middle Black-High White-High

100

90

80

70

60

50

40

30

20

10

0

Race and Income

P

ercentofLoans

Not high-cost, foreclosed loans

Not high-cost, not foreclosed loans

High-cost, foreclosed loans

High-cost, not foreclosed loans


14/32

Foreclosure Counseling: Dierent

Agencies, Dierent Approaches

To handle the enormous demand or oreclosure counseling,

Cuyahoga County contracted with our local agencies to provide

services. All our provide ace-to-ace, individualized counseling,

a method thats been shown to be more eective than alternative

methods o advising an individual through the oreclosure process.

Yet beneath the umbrella o that general methodin-person, one on

one counselingagencies oten employ distinct and innovative

approaches to achieve similar outcomes.

Two o the agencies contracted to counsel Cuyahoga County home

owners are Empowering and Strengthening Ohios People, or ESOP,and Neighborhood Housing Services o Greater Cleveland (it goes

by NHS or short). Each provides oreclosure prevention counsel-

ing services, but the two have dierent underlying philosophies. A

community organizing agency, ESOP specializes in negotiating with

recalcitrant lenders and servicers to develop contracts that acilitate

workouts on behal o homeowners. Unlike ESOP, Neighborhood

Housing Services is rst and oremost an agency that assists people

in becoming successul homeowners. And similar to the Cleveland

Housing Network and Community Housing Solutionsthe remaining

two counseling agencies in the County programNHSs oreclosure

prevention counseling grew out o the organizations original mission.

ESOP employs an unapologetically aggressive style in helping

distressed homeowners. Lenders and servicers with a record o

multiple client complaints become ocal points or action. ESOP

community organizers work with residents to investigate a targeted

mortgage companys lending practices, looking or evidence o

discriminatory and predatory lending. Together with residents, ESOP

invites the companys CEO to negotiate a air-lending agreement

that, among other things, designates a single contact person within

that company whom ESOP counselors can call on behal o home-

owners when theyre having trouble with their mortgages.

Some lenders and loan servicers meet willingly with ESOP and

residents. I a targeted company does not, ESOP pursues direct ac-

tion tactics designed to draw media attention and generate negative

publicity surrounding the companys business practices. Aterward,

the company usually complies. ESOP shares its list o partnering

companiesthose with which ESOP has negotiated the contracts

with area counseling agencies and United Ways 2-1-1 Call or Help,

so that homeowners with mortgages serviced by those companiescan be steered directly to ESOP or help.

Neighborhood Housing Services, in addition to providing counseling

services to Cuyahoga County residents, is also part o the nationwide

NeighborWorks network and uses this model o oreclosure preven-

tion. As such, the agency can draw on state rescue unds (in

addition to county rescue unds) i needed to help home-owners

prevent oreclosure.

At Neighborhood Housing Services, homeowners are assigned a

counselor who collects and processes the details o their case,

including any circumstances that might trigger oreclosure, such as

job loss, underemployment, and medical issues. The counselor thenassesses the homeowners situation and explores possible solu-

tions. Foreclosure solutions are not one-size-ts-all, o course, and

NHS counselors ocus on nding a solutionrom renancing the

mortgage loan to negotiating workouts with a servicer to becoming a

renterthat will oster sustainable, long-term homeownership or the

distressed borrower. For Neighborhood Housing Services, the issue

isnt just homeownership; its appropriate homeownership.

Whats best or the homeowner is not always

staying in the house,

explains Lou Tisler, executive director of NHS.

That doesnt mean that the homeowner shouldnt

own a house, just not that house.

I a Neighborhood Housing Services counselor assigned to a

distressed homeowner nds that the client does not have the

wherewithal to be a long-term homeowner, the agency will advise

the homeowner on rental housing options and, oten, will help the

individual nd a new place to live.

To ESOP counselors, resident empowerment is as vital an outcome

as oreclosure resolution. Our goal is really to build leadership with

the people, states lead organizer Jenelle Dame. They come to usor oreclosure help, and we provide that service to them. But we also

try to encourage leadership within them. Resident empowerment

is an important orce or change.

12


15/32

Te resul in Cleveland and Norheas Ohio has been scores andscores o unoccupied and abandoned homes. Wha does hamean or individuals, or communiies, and or an enire region

when hese properiesmany o hem aging and poorly main-ained, and or which here is scan demand owing o he ciysdeclining populaionlose heir occupans and become vacan?

Te nex secion o his repor deails he slow, debiliaingmovemen o oreclosed houses hrough he legal process and

ino vacancy.

Stage II:Caught in Foreclosure Limbo

Formally, he oreclosure process resuls in houses being sold aoreclosure sale (reerred o as sheris sale in Ohio). In a ypicalmarke, here is a reasonable demand or properies ha emergerom he oreclosure process via a public aucion. A oreclosuresale, i is expeced ha properies will be sold o buyers who willquickly bring hem back o occupancy and producive use. Bu ashe CWU repor Foreclosure and Beyond shows, he progno-sis or properies in Norheas Ohio coming ou o he oreclosureprocess in recen years is grim.

Prior o his crisis, greaer numbers o oreclosed properieswere being purchased by privae buyers (individual people andinvesors) a oreclosure sale. In 2000, or example, privae buyersmade up 35 percen o he marke or properies a oreclosuresale. Now, almos all properies coming ou o oreclosure saleener EO (real-esae-owned) saus (see gure 8). Where hereused o be a sizeable demand or oreclosed properies, here are

virually no privae buyers a oreclosure sales any longer; privaebuyers made up only 8 percen o he marke or oreclosure salesin 2008.7 Area banks, oo, are largely absen rom he local EOpicure, which is now almos compleely dominaed by naionallenders and governmen sponsored eniies (Coulon, Mikelbank,and Schramm 2008). Wha ha means is, wih less demand ororeclosure sale properies, hese vacan homes are more likely osi idle and unended. Empy houses are suscepible o looers,

who readily srip srucures o anyhing wih resale value, includingaluminum siding, copper piping, plumbing xures, and woodendoors. When nally sold ou o EO, hey have los much o heirmarke value.

Figure 9 illusraes he proporion o Cuyahoga Couny proper-ies remaining in EO over ime. Homes are remaining in EOor longer periods. Among properies ha enered EO in 2008,nearly our ou o 10 remained unsold aer 12 monhs. Forhomes ha enered EO rom 2000 o 2002, ha sill-unsold-aer-a-year gure was closer o one in 10. So a bad siuaion isgeting worse (Coulon, Mikelbank, and Schramm 2008).

Properies in EO can be problemaic because hey are suscepi-ble o vandalism and propery devaluaion. I can also be diculor neighbors and ohers o gure ou who owns he propery,and who should be called or ned when he propery is in viola-ion o housing codes. In Ohio, propery owners are supposed orecord heir deeds o ideniy hemselves as owner o record orhe propery. When a propery has revered o a bank in a oreclosure sale, or insance, bu he bank has no recorded he deed asa mater o public record, he resul is adminisraive conusion.

13

Figure 7. Subprime Foreclosures by Concentration o Loans to Arican American Borrowers, 2005-07

0 4 8 Miles

0%

0.1% - 10.0%

10.1% -25.0%

25.1% - 45.0%

45.1% - 65.0%

65.1% - 100.0%

Cleveland boundary

Subprime foreclosure

Percent originations to AfricanAmericans by census tract

Source: HMDA, Loan Originaion andForeclosure Mached Daa File


16/32

Cour dockes will indicae ownership by he nancial insiu-ion; however, wihou he deeds being recorded, he ownero public record will be he oreclosed-upon homeowner. Tisdiscrepancy becomes an issue when properies are cied or code

violaions and oher public nuisances. Noices are misdireced andrepairs delayed, which resuls in hese empy srucures coninu-ing o decay. In 2008, Ohio House Bill 1388 was passed ha allowssheri s deparmens o record oreclosure deeds on behal o anew ownera helpul change adminisraively.

As i having enormous numbers o properies languishing in EOwere no enough, properies ha ge suck in he oreclosure pro-cess isel can be even more problemaic. Consider he ollowingscenarios and he poenial conusion ha surrounds each.

Inone,alenderorservicerinitiatesforeclosureproceedings

agains a homeowner bu never ollows hrough o comple-ion. Te homeowner, meanwhile, has oen le he propery,

believing he has los righs o he propery as a resul o heoreclosure ling.

Figure 8. Ownership Ater Foreclosure Sale, 2000-09

Figure 9. Estimated Proportion o Properties Remaining in REO (Survival Function)

14

35%

11%

20%

34%

31%

10%

20%

39%

30%

13%

19%

38%

26%

16%

20%

38%

24%

14%

21%

41%

18%

13%

25%

44%

11%

11%

27%

50%

8%

12%

22%

58%

8%

17%

25%

50%

9%

19%

25%

48%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NumberofForeclosure

Sales

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Private individual/CDC/Land bank/Investor

Local lender

Government-sponsored enterprise

National lender

Source: Tabulaion by Cener on Urban Povery and Communiy Developmen o Cuyahoga Couny Audior Daa.

Source: Tabulaion by Cener on Urban Povery and Communiy Developmen o Cuyahoga Couny Audior Daa.

1%

9%

12%

17%

34%

0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99 102 105 108

NumberofFore

closuresFiled

1.00

0.90

0.80

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0

Months Since REO Entry

2000-02

2003-05

2006

2007

2008


17/32

Inanother,alenderorservicerlesaforeclosureproceeding

and goes along wih he case hrough judgmen, bu neverakes ha nal sep o ling an order o sale o promp hecour o sell he propery. Again, he homeowner has oenalready vacaed he home.

Inathirdscenario,alenderlesanorderofsale,andthen,

absen a buyer a oreclosure sale, does no purchase hepropery isel.

Incredibly, in all hree o hese scenarios, called bank walk-a-ways, he homeowner reains responsibiliy or he axes andmainenance o he propery, owing o an Ohio law ha sipulaeshe oreclosed homeowner remains he righul owner unil ahome is sold a oreclosure sale and a oreclosure deed graned.Tis can lead o a number o oreclosed and abandoned properiesha are unknown o auhoriies, and can also lead o roubles orhe homeowner.

Te Role o a Housing Court

Judge aymond Pianka and his cour play a visible and criicalrole in esablishing and enorcing accounabiliy among ownerso EO properies as well as hose allowing heir properies o si

vacan and unended (see A Holisic Housing Cour). Toughhe cour relies on ciy housing inspecors and prosecuors o

bring problems o cour, once a case arrives in housing cour,Pianka uses code enorcemen as a ool o preven urher homeand neighborhood deerioraion. Lenders and corporaions arecharged heavy nes or ailing o mainain he properies hey

own, hough hese nes are lessened i owners comply wih hecours orders. In many insances, hese companies are ou-o-saeeniies ha have purchased muliple properies ou o oreclo-sure, sigh unseen. Some simply ignore he summons. Piankasresponse? He levies nes o up o $1,000 a day agains companiesha ail o show up o cour.

Pianka and his sa have also parnered wih local organizaionso help address oreclosure a each o hree sages: prevening

oreclosure, managing properies in oreclosure, and ndingresponsible owners when oreclosure can be avoided. Tesecollaboraions have resuled in, among oher posiive oucomes,more homeowners seeking assisance beore heir loans go inooreclosure and he xing up o properies o address code

violaions.

Te cours aren he only ones aking acion agains heparies responsible or he devasaion in Norheas Ohio. InSlavic Village, some residens underook an invesigaion onheir own ino speculaors who purchased and sold properies inheir communiy (see Invesigaing Morgage Fraud in Slavic

Village). A direc resul o heir eors is ha he CuyahogaCouny prosecuor, acing on he inormaion gahered by heseresidens, is pursuing brokers and oher eniies suspeced oconribuing hrough raudulen aciviy o he neighborhoodsdevasaion. Furher, he couny esablished a muli-agency askorce ha involves he U.S. atorney, he FBI, HUDs inspecorgeneral, he Ohio Atorney General, and he couny prosecuoro invesigae morgage raud in Norheas Ohio.

Although Clevelands Housing Court adjudicates cases on a house-by-house basis, its

work aects entire neighborhoods. The court has made highly creative use o the tools

at its disposal. To help homeowners cited or housing code violations and headed or possible oreclosure avoid that outcome, Housing Court

specialists connect them with housing counselors that advocate or mortgage workouts. To maintain the value o properties in the process

o oreclosure, the court uses NEO CANDO data to send letters to Cleveland homeowners in oreclosure inorming them o their rights and

responsibilities while in oreclosure, and encouraging them to remain in their homes. A letter returned to the court is a sign o a vacant property,

which puts that oreclosure case on the ast track to protect the propertys value. To keep neighbors inormed, the court posts inormation about

properties in oreclosure on placards on the property. This action gives neighbors someone to contact i they spot problems with the properties.

The court has also established a rm tone o accountability in Cleveland. It hears cases o nuisance abatement, which allows a court-appointed

party to take control o a property i it is a public nuisance. The appointed party, usually a community development corporation, can rehabilitate

the property or demolish it at the negligent owners expense. Also, a clean hands docket prevents a party rom using the civil side o a court

(or eviction) i there is a pending criminal case (housing code violation) against that party.

The court also holds banks and investors responsible or the upkeep o their oreclosed and vacant properties. Corporate deenders who dont

take the court seriously do so at their peril; when corporate deenders werent showing up to their court dates, the court promptly began to try

their cases in absentia, ruling and assigning nes without a deendant present. Since doing so and collecting on nes, more corporate deend-

ers are taking code violations seriously. No longer able to try in absentia, the court now nds absent deendants in contempt o court until they

appear beore the judge.

That tough-stance practice has certainly made corporate deendants take noticeand prompted many more to show up or their court dates.

More to the point, these negligent corporate property owners are now taking code violations seriously, ollowing up on the citations and making

ill-tended houses in Clevelands neighborhoods more viable candidates or return to productive use.

15

A Holistic Housing Court


18/32

Investigating Mortgage Fraud in Slavic Village

For each step orward, its been two painul steps back or Slavic Village,

the once-vibrant Cleveland neighborhood that has been decimated by

the oreclosure crisis. In one measure o the communitys orward prog-

ress, Slavic Village Development (a community development corporation

built and rehabilitated more than 1,500 housing units in this neighbor-

hood o modest homes on narrow, tree-lined streets. Today, nearly the

same number o Slavic Village homes are in need o demolition. In this

community, raud and oreclosure are entwined ills, leaving scores o

homes abandoned, boarded up, and stripped o virtually all value.

Wed drive by a boarded-up house, a teeny little cottage, that

sold or $80,000 and we knew that this was wrong. We knew

that there was raud going on.

says Marie Kittredge, executive director of Slavic Village

Development, or SVD.

In mid-2008, a task orce comprised o residents, SVD sta and interns, and under the leadership o city councilman Tony Brancatelli, released

a report on fipping and raudulent activity in the community between 2003 and 2007. The report denes fipping as buying inexpensive

property (oten a oreclosure), making little to no improvements, and selling it at a price higher than the houses air market value as assessedby the county. The task orce examined thousands o Certicates o Disclosure, a document required in the City o Cleveland that records the

appraiser and mortgage broker on a given property transaction. Their research revealed some distinct and troubling patterns between brokers

and appraisers.

Using additional data rom NEO CANDO, the task orce then identied a long list o property transactions where homes were nanced with

a 90 percent loan-to-value ratio, with a second mortgage oten making up the dierence between the home price and the rst loan. These

homes were then resoldwithout any construction permits having been led or any other noticeable improvements made to the propertyat a

200 percent to 600 percent price increase.

The group submitted the results o their investigation to law-enorcement authorities. Their diligent work eventually led to the indictment o

three individuals accused o making $5.8 million in raudulent loans. As o April 16, 2010, two o the deendants had pleaded guilty to mort-

gage raud-related oenses.

Unorunaely, here is no shorage o morgage raud cases inNorheas Ohio. In Augus 2009, Cuyahoga Couny indiced 41people in a morgage raud scheme ha involved $44 million andmore han 450 homes. Nearly 80 percen o he houses caugh inhe scheme were also in oreclosure (urner 2009).

In oher Cleveland neighborhoods, residens and local groupshave devised novel approaches o he problem o houses siting

vacan and vulnerable during he oreclosure process. On one

sree, residens have aken up brushes o brighen empy homes,adding pained curains, fower pos, even silhouetes o peopleinside he home. Tis aesheic li is aimed a deerring vandals,squaters, and drug dealers rom enering vacan properies, bu ihas also given remaining propery owners a sense o conrol andecacy in heir neighborhood.

Shaker Heighs, an inner-ring suburb o some 12,000 households,had more han 500 vacan homes a he end o 2008, a ac hais no a all apparen driving hrough he communiy. Te ciydoesn allow owners o board up heir vacan properies, orexample; i a homeowner does so, he ciy removes he plywood,

replaces broken windows and doors wih inac ones, and charges

he owners no only or maerials and labor, bu a 20 percensurcharge as well. eeming fower baskes hang rom many o heciys sree lamps. Te baskes are an apparen exravagance inhese ough economic imes, according o he ciys economicdevelopmen direcor, Kamla Lewis, bu a necessary expense inour eor o mainain appearancesand propery values.

Like he Cleveland residens who keep wach over he vacanhomes in heir neighborhoods, Shaker Heighs ocials hope ha

heir eors are no merely keeping a nger in he dike.

Stage III:Te Future o Foreclosed and REO Properties

Despie governmen and neighborhood atemps o prevendeerioraion o empy homes while hey slog hrough oreclosureor idle in EO, he desired oucomesale o hese properies oowners who will resore he properies o useul purposecomesa an increasingly seep price. In heir hird repor, Beyond EO,CWU researchers ound ha in Cuyahoga Couny, in he Ciy oCleveland, and in Clevelands suburbs, properies sold ou o EOare selling or ar less han heir esimaed marke value beore

oreclosure ling and sale (see gure 10).

16


19/32

Figure 10. Value Remaining ater Foreclosure Sale as Percentage o Previous Estimated Market Value

(in 2009 dollars), 2000-09

Back in 2000, or example, properies sold ou o EO were pur-chased or approximaely 75 percen o heir previous esimaedmarke value. Tis was rue o all hree geographiescouny, ciy,and suburbs. No grea, houses losing 25 percen o heir valueduring he oreclosure process, bu no ha surprising. By 2007,however, properies leaving EO in he Ciy o Cleveland wereselling or a shocking 13 percen o heir esimaed marke value(Coulon, Mikelbank, and Schramm 2008).

In Cuyahoga Couny and suburban Cleveland, properies sellingou o EO in 2007 ared only slighly beter, eching sale priceso 22 percen and 37 percen o heir esimaed marke value,respecively. For a weak marke like Norheas Ohio ha saw litlerun-up in housing values in he early 2000s, his precipious dropin home values is a debiliaing blow o neighborhoods, communi-ies, and he enire region (Coulon, Schramm, and Hirsh 2008).

Evidence o he deerioraion in neighborhoods is he ac ha EOproperies up hrough 2008 were being sold a exremely disressedpricesdened as $10,000 or lessmainly o corporaions andindividuals looking or bargains.9 Many o hese buyers were rom

ouside Ohio.

Beween 2005 and 2008, EO properies purchaseda hese very low prices made up an increasing percenage o allEO properies sold. As shown in gure 11, 4.3 percen o EOproperies in Cuyahoga Couny in 2005 were sold a exremely dis-ressed prices. Tis proporion skyrockeed o 43 percen in 2008,a 10-old increase (Coulon, Schramm, and Hirsh 2008).

As is he case wih subprime lending, his rend o selling housesa exremely low prices has aeced he region disproporionaely.Some neighborhoods are much harder hi han ohers and, as

wih subprime lending, much o his aciviy has been concen-raed on Clevelands eas side. In 2005, beween 7 and 8 percen

o eas-side properies coming ou o EO were sold or less han$10,000. Tree years laer,nearly 80 perceno he more han2,770 properies on he eas side sold ou o EO were purchaseda hese exremely disressed prices (Coulon, Schramm, andHirsh 2008). I is hoped ha he implemenaion o Neighbor-hood Sabilizaion Program plans will lead o some o heselow-value EO properies being acquired by local governmensand nonpros, o be rehabiliaed or demolished and reurned oproducive use as residences or green space.

Houses or Mere Tousands, Purchased Sight Unseen

Te rend o buying and selling homes or such low prices raisesa number o quesions. Who is selling hese properies a suchlow prices, and who is buying hem? Wha proporion o heransacions are leading o producive uses o hese properies?o beter undersand he marke orces a work in hese ransac-ions, communiy developmen proessionals and local researchers eamed up o invesigae he quesions above. Locaingconcree daa on he condiion o properies aer EO and on

buyers and sellers o hese properies is dicul. Neverheless,heir research ndings shed some ligh on whas been happen-ing in Cleveland, and poin o some poenial reasons why i has

been so dicul o sop or even slow he process.

One key nding, or example, is ha a small number o sellersare making mos o hese sales. Te daa records o housands ohouses sold in Cuyahoga Couny in 2007 and 2008 or $10,000or less reveal ha, alhough numerous nancial insiuion areinvolved in hese sales, he op 10 sellers o EO properies or$10,000 or less accoun or 72 percen o hese ransacions (see

gure 12) (Coulon, Schramm, and Hirsh 2008).

17

Suburbs of Cleveland

Cuyahoga County

City of Cleveland

Pe

rcent

90

80

70

60

50

40

30

20

10

02000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Source: Tabulaion by Cener on Urban Povery and CommuniyDevelopmen o Cuyahoga Couny Audior Daa.

*Observed or only 15 months at most


20/32

Anoher nding is ha houses sold a $10,000 or less are makingup subsanial percenages o all EO properies sold by someindividual banks or morgage companies. However, his ndingis less inerpreable, because o he diculy o ideniying heresponsible eniy via public records daa. I is imporan o noeha while public record indicaes he pary ha holds ile o apropery, i is oen he case ha a bank or lender has hired a ser-

vicer o handle ransacions relaed o he propery. Such opaciymakes any ransacions relaed o hese properies very dicul(Coulon, Schramm, and Hirsh 2008).

On he purchasing side, daa reveal ha here were many buyerso hese properiesmore han 1,200wih only a handul buy-ing groups o more han 100 properies in he Ciy o Cleveland.Here, oo, he daa are no always indicaive o whas happening.Buyers may purchase properies under many dieren auspices,or insance, and may own many more properies han publicrecords show. By and large, however, buyers are ou-o-saecorporaions or invesors. Tese invesors ypically have rela-ionships wih sellers o EO properies. Some sellers packageproperies regionally and sell o heir cusomers in bulk; almosall properies are sold sigh unseen. Tese ransacions, which arecollecively dening and reshaping some neighborhoods in heregion, are oen being conduced by individuals who have never

been o Norheas Ohio (Coulon, Schramm, and Hirsh 2008).

In ac, he daa reveal oher ineresing paterns, some unsurpris-ing, ohers disquieing, abou hese ransacions. Te majoriy ohese properies become ax delinquen. Many are resold quicklyin very poor condiion wih only a small price increase. Some ohese bulk purchasers are adoping business models ha involveland conracs, direc nancing o homebuyers, and oher ools

ha are ouside he mainsream real esae marke pracices(Coulon, Schramm, and Hirsh 2008).

Since his phenomenon is so new, he success o his privae-marke model o moving EO propery back o occupancyand producive use canno ye be evaluaed. In addiion o hismarke process, nonpros, governmens, and communiy developmen corporaions have begun developing a more promisingmodel o bringing properies back o producive use. Some o

hese eors, including he couny land bank, are discussed inhe ollowing secion.

From Downward Spiral to Productive Reuse

Is a remendous challenge or any region o ace, le alone onesruggling wih double-digi unemploymen and anicipainganoher wave o oreclosures. Whas he bes way or local leaders ohelp move hese vas quaniies o houses back ino producive use?

A criical componen is nancing. Te ederal Neighborhood Sabi-lizaion Program (NSP) is a crucial aspec o his equaion, allotingunds o localiies so hey may be used o mee ha localiys specicneeds. NSP unds in Cleveland and Cuyahoga Couny help supporhe demoliion and remediaion o hese vacan and abandonedproperies. A consorium o public agencies has been awarded NSPII dollars ha will direc addiional remediaion eors o selecedhard-hi neighborhoods wih srong marke poenial.

Anoher criical componen o any such resoraive eor is con-necing EO properies o organizaions and people who can

bring hem back o occupancy or producive use. On a naionallevel, here are wo organizaions ha acquire EO properiesand connec hem o local organizaions: Te nonpro Naiona

18

Figure 11. Percentage o All REO Properties Sold at $10,000 or Less o All Properties

Leaving REO (in 2009 dollars), 2005-09

Source: Tabulaion by Cener on Urban Poveryand Communiy Developmen o Cuyahoga CounyAudior Daa.

P

ercent

2005 2006 2007 2008 2009

90

80

70

60

50

40

30

20

10

0

Year of REO Sale

City of Cleveland

East side of Cleveland

West side of Cleveland

East inner suburb

Outer suburb

West inner suburb

Cuyahoga County


21/32

Communiy Sabilizaion rus (NCS) was ormed in 2008 bysix naional nonpros wih experise in communiy develop-men and housing. Te EO Clearinghouse, a or-pro agencyormed by Saeguard Properies, was esablished in early 2009.Boh agencies purpose is o help sem he decline o communi-ies wih high concenraions o vacan and abandoned propery,and boh work o connec naional-level servicers wih local

communiy developmen organizaions, oering oreclosedproperies o hese organizaions a discouned raes. Cleveland

was one o he rs ciies o work wih NCS and he EOClearinghouse. Curren work is small in scale and sraegicallyocused on very specic areas, and will help inorm and direc

broader eors going orward.

On a local level, once an organizaion esablishes a connecionwih holders o EO properiesa someimes dicul sepican employ one o several measures o reurn properies o viableuse. One new approach is he recenly esablished couny land

bank, whose primary uncion is o help reurn vacan and aban-

doned properies in Cuyahoga Couny o producive use. Tecouny land bank, which is srucured as a couny land reuiliza-ion corporaion, is modeled aer a highly successul program inGenesee Couny, Michigan (see Cuyahoga Couny Land Bank).

In Ohio, vacan land ha is ax delinquen is sold wihou appraisalo he highes bidder or he amoun o axes, penalies, ineres,assessmens, and charges agains he land, plus cour coss. Goingorward, he process will be much more ecien. Te land bankcan acquire ax-oreclosed lands or a nominal price, along wihselec lands oreied o he sae. I can also accep propery in lieu

o oreclosure rom he owner o ax-delinquen land. Te landbank manages is lands and can sell and oversee developmen ohe lands in is purview provided he goal is reuse.

Te land bank can help urher boh communiy and regionalrevializaion eors. By sraegically amassing parcels o land, hecounys land bank can help communiies implemen plans or

communal green spaces. Pooling properies in he new land bankwill also miigae he risks associaed wih land ownership, whichpreviously were borne by small, local CDCs. Tese same CDCsare expeced o play a cenral role in geting land bank properies

back on he marke.

In December 2009, he Cuyahoga Couny land bank announceda landmark deal wih secondary morgage marke gian FannieMae. Te secondary morgage marke gian owns hundreds ooreclosed and abandoned properies in he Cleveland area,many o which bear houses in likely need o demoliion. In hedeal, he land bank will be able o purchase properies rom Fan-

nie Mae or $1 each. In addiion, Fannie Mae agreed o pay up o$3,500 o demoliion coss on each propery. Going orward, heland bank will have he opion o purchase any o Fannie Maesoreclosed properies valued a less han $25,000; hose proper-ies he land bank elecs no o purchase (i has 30 days o evalu-ae hem or acquisiion) will be oered or sale o he widermarke. Te deal marks a signican sep orward or he land

bank. Prior o he announcemen o his arrangemen, he landbank had acquired some 20 properies, wih several dozen moreunder evaluaion. Is rs ranser rom Fannie Mae consiss o25 addiional properies or he land bank.

19

Figure 12. Top Sellers o REO Properties, Cuyahoga County, 2007-08

SellerREO Propertiessold by seller,

all prices

Number o REOproperties sold$10,000 or less

Percent ototal REO

properties sold

Percent o REOproperties soldor $10,000 orless by seller

Deutsche Bank National Trust 1,638 837 20% 51%

Wells Fargo 1,273 601 14% 47%

U.S. Bank National Association 1,054 445 11% 42%

Fannie Mae 1,292 361 9% 28%

Bank o New York 638 219 5% 34%

LaSalle Bank National Association 365 184 4% 50%

HSBC Bank 330 133 3% 40%

JP Morgan Chase Bank 254 103 2% 41%

Wachovia Bank 176 85 2% 48%

Homecoming Financial Network 122 50 1% 41%

Total (top sellers) 7,142 3,018 72% 67%

Total REO properties sold, all sellers 10,728 4,210

Source: Cuyahoga Couny Audior ranser daa om NEO CANDO, Cener on Urban Povery and Communiy Developmen, Mandel School oApplied Social Sciences, Case Wesern Reserve Universiy. htp://neocando.case.edu.


22/32

Finally, eors are underway a he neighborhood level o helppreven homes rom deerioraing, wheher hey are occupiedor emporarily vacan. wo programs ha ocus on homerehabiliaion o keep neighborhoods in shape are OpporuniyHomes and Home epair esource Cener (see OpporuniyHomes andMainaining Home and Neighborhood Value).

Norheas Ohio has many programs ha, like hese wo, comple-men eors a he ciy and couny level aimed a combaing heoreclosure crisis. Te regions muliaceed, coordinaed, andexensive response is indeed a refecion o he willul persever-ance o residens, communiy-based organizaions, and ciy andcouny ocials alike.

Conclusions and Policy Considerations

Tis repor weaves ogeher daa on he oreclosure crisis in heCleveland area wih sories o how he communiy is responding.

In so doing, i provides a conexualized accoun o he acs,raher han a causal analysis, and aims o inorm and conribueo recovery eors aking place in communiies across henaion. While i may be emping o ry o pinpoin who or

wha is o blame, he daa are no up o revealing moives, noro soring ou he infuences o marke orces, regulaory ailures

and insiuional and individual decisions. Neverheless, henumbers and sories ogeher pain a picure o wha unoldedhere, wha he consequences have been, and wha he commu-niy has been called upon o address.

o summarize wha he daa reveal, Cleveland and CuyahogaCouny enered his decade wih a modesly appreciaing housingmarke, a manageable number o oreclosures, and a communiydevelopmen sysem se up o help reurn vacan properies oproducive use. Ten subprime morgages arrived on he sceneand, in some secions o he ciy and suburbs, rapidly supplaned

One o the biggest challenges acing Cuyahoga County in addressing the

growing problem posed by abandoned and vacant properties is how to keep

oreclosed properties out o the hands o speculators and make them available

to private investors and CDCs as part o neighborhood revitalization strategies.

The solution, championed by Cuyahoga County Treasurer Jim Rokakis, was

state legislation (Ohio SB 353), which passed on December 10, 2008, and

authorizes a countywide land bank that would unction as a mechanism to

accelerate the reutilization o these distressed properties.

The goals or the land bank are to

Facilitate the reclamation, rehabilitation, and reutilization of vacant,

abandoned, tax oreclosed, or other real property

Efciently hold and manage that real property pending its reclamation,

rehabilitation, and reutilization

Assist governmental entities and other nonprot or for-prot entities

in the assembly o that real property and the clearing o title in a

coordinated manner

Promote economic and housing development of the county or region

The legislation authorized the creation o a Community Improvement Corporation (CIC) known as the Cuyahoga County Land ReutilizationCorporation (LRC). This program allows ocials in the states most populous county to set up a nonprot land reutilization program to accept or

buy oreclosed or abandoned properties. The land bank is able to demolish properties beyond repair, while others can be held in a trust.

The LRCs jurisdiction initially is limited to Cuyahoga County; however, the legislation authorizes any county adjoining Cuyahoga County to

designate the LRC as its county land reutilization corporation by entering into an agreement with the LRC. The legislation allows selected non-

productive land to be sold without appraisal or the amount o taxes, penalties, interest, assessments, and charges against the land plus court

costs. The LRC has the authority to sell land, without competitive bidding, but or its air market value, to any person it chooses so long as it

obtains covenants rom the buyer to assure the lands eective reutilization.

The primary sources o unding or the LRCs operations are penalties and interest paid on current taxes and assessments that are not

paid when due. Rokakis estimates that capturing the penalties and interest on delinquent taxes could provide an annual amount to und

the activities o the county land bank o approximately $7 million. The treasurer also anticipates secondary sources o unding such as

re-sale o acquired properties to qualied buyers, ees or managing mothballed properties, plus a ew other local government revenues.

In addition, the LRC is authorized to borrow money, issue bonds, accept gits, and apply in its own name or grants.

Cuyahoga County Land Bank

20


23/32

convenional loans as he primary produc or home purchasesand renances. By 2005, more han 10,000 oreclosures were ledon residenial properies in a single year. Te sheer numbers ooreclosures quickly overwhelmed he sysem. Neighborhoods

wih large minoriy populaions were paricularly hard hi by ore-closures and he negaive spillover eecs.

Te daa also documen a growing number o properies haenered prolonged periods o vacancy, suck eiher in he ore-

closure process or in EO porolios o morgage companiesand servicers. Unended properies deerioraed and were

vandalized, reducing he likelihood ha hese houses could besold and reoccupied. Te value o housing sock plummeed,leading speculaors o buy properies in some neighborhoodsin bulk and or pennies on he dollar.

Te daa reveal all o his. Going orward, evidence-basedresearch will coninue o reveal which places and groups aremos negaively aeced, wha progress is being made inaddressing he crisis, and wha challenges remain.

Te sidebar sories, on he oher hand, illusrae some o he

ways ha local governmen, nonpro organizaions, and com-muniy groups mobilized o address he problems spawned byhis crisis. Each o hese sories demonsraes ha coordinaedand daa-driven acion is needed on many inerrelaed rons,and exemplies he value o cooperaion among several levels ogovernmen, nonpro organizaions, communiy leaders, andlocal ciizens. And he sories are sill being writen.

Beyond such responses, wha more is needed or communiieslike Cleveland o weaher his crisis and preven similar siuaions

in he uure? We have cerainly learned a grea deal rom ourexperiences. From where we sand, hen, as a weak-marke ciyplanning o rebuild rom his crisis, we acknowledge he need oaddress hree key areas. Te rs involves regulaory reorm o bohconsumer proecions and he credi sysem as a whole. Tesecond has o do wih preserving and expanding aordablehousing opions. Te hird involves policies ha enable ciies likeCleveland o reconsiue a smaller, susainable housing marke

wihin he conex o a srong regional economy.

1. Implemen appropriae incenive schemes and monioringmechanisms o srenghen consumer proecions.

Foreclosures are remendously cosly o he neighborhoods inwhich hey concenrae, and heir impac is long lasing. Spillovercoss, which mushroom as houses remain vacan, are borne byneighbors, local governmen, and philanhropic organizaions.

Wheher due o lack o incenives or insucien capaciy, loanmodicaions by lenders and servicers, many o which have nolocal connecion, have done litle o slow he pace o oreclo-

sures and keep amilies in heir homes. Consequenly, coss ormainaining properies have skyrockeed while a he same imemany servicers are reusing o spend dollars on propery upkeep.

A proposed way o miigae his problem requires servicers oescrow nuisance-abaemen unds a he ime a oreclosure is led(Mallach 2009). Enorcing he escrow requiremen could boosservicers incenives o modiy disressed loans when possible.

When a loan can be saved, hese escrowed unds would be avail-able or upkeep o he propery pos-oreclosure, reeing he ciysresources o suppor, or example, oreclosure prevenion eors.

An innovative partnership among a unding intermediary, community development corporations,

neighborhood organizers, and a local university is helping to preserve home and neighborhood

values in Cuyahoga County. The intermediary is Neighborhood Progress Inc. (NPI), a well-known and highly respected community development

group that took the lead in assembling this partnership. The partnerships unique initiative is called Opportunity Homes.

A pilot initiative operating in six o Clevelands neighborhoods, Opportunity Homes has three components: rehabbing homes, demolishing

homes, and preventing oreclosures through data-driven strategic organizing. With $21 million o unding, Opportunity Homes plans on

rehabilitating 121 homes and demolishing another 100 o the most deteriorated vacant homes in the six neighborhoodsSlavic Village,

Tremont, BuckeyeShaker, Fairax, Glenville, and DetroitShoreway. (These six neighborhoods are also NPIs six Strategic Investment Areas,

areas competitively chosen or investment on the basis o strengths such as location, number o community institutions, and eectiveness

o local CDCs and on potential or revitalization.)

The rehabilitated homes will eature energy eciency, tax abatements, and aordablepricing. On the other side o the coin, the demolition o badly deteriorated homes will rid

the neighborhoods o blighted property and create room or other types o investment.

Opportunities or using the space post-demolition include constructing new homes,

establishing communal green spaces, and expanding yards.

The third component o the initiative, oreclosure prevention, is called Early Warning.

Through Early Warning, the partnership identies mortgages at risk o oreclosure,

contacts the homeowners, and engages them in oreclosure counseling. Such targeting

o oreclosure-prevention eorts helps the partnership reach out to vulnerable home-

owners in a time- and cost-ecient manner, with the goal o modiying an unaordable

loan beore a homeowner deaults.

Opportunity Homes

21

The volume o houses in need o repair is sogreat that we simply cant handle it all,

explains Frank Ford, senior vice president for

research and development at NPI.

Opportunity Homes builds o existing assets

in neighborhoods, like new schools, libraries

and green space. No one can aord to fx

everything; you have to work strategically.


24/32

Maintaining Home and Neighborhood Value

The Home Repair Resource Center (HRRC) in Cleveland Heights, an inner-ring suburb on Clevelands hard-hit east side, is a

small, community-based organization with a big mission. Founded in 1971 by members o a local congregation, the agency

enables community members to maintain their homes, helping keep the neighborhood competitive and marketable.

The organizations comprehensive programming is aimed at preventing both oreclosure and home deterioration. A

HUD-approved oreclosure education and counseling agency, the Home Repair Resource Center also oers nancial

literacy classes. And the center has at least one unique oering: education and resources centered on home repairs.

One program helps low- and moderate-income homeowners get quality home-repair loans. A how-to home-repair

program or all residents teaches participants specic home-repair skills. Finally, a tool-loan program allows income-

eligible residents to use expensive tools to complete repair and maintenance work to their properties. In 2008, HRRC

enabled 245 households to complete nearly $700,500 in home repairs.

And the organization is now rolling up its sleeves and doing repair work itsel. In response to the current need or

quality home rehabilitation, the center created its Home in the Heights program. Through a partnership with the City o

Cleveland Heights, HRRC can purchase oreclosed homes at low prices and rehabilitate the property in order to sell it.

Theres a lot o rehab going on out there, acknowledges HRRC executive director Kathryn Lad.Were not going to ip a house; we want to raise the value o all the houses on the street.

Were not interested in doing just the minimal.

Prots rom the sale o these rehabbed houses will und uture home purchases and rehabilitation. HRRC recentlyobtained its rst property and has begun rehabilitation work. Best o all, theres a buyer already lined up.

People oten ask Lad why organizations similar to HRRC do not exist in their own communities. This organization was

started by grassroots people, she tells them. I you want something like this in your community, then do something

about it. We were ounded by a small group o people that wanted to make a dierence in our community.

People, she emphasized, made it happen.

22


25/32

I no accompanied by eecive enorcemen, however, such anopion migh simply resul in more homes alling hrough hecracks.

In Clevelands low-income neighborhoods, increased access ocredi was mainly provided in he orm o subprime loans. Tecompanies originaing a large proporion o hese loans reliedheavily on independen morgage brokers who had monearyincenives o originae loans ha carried no only higher ineres

raes, bu higher coss and higher borrower risk as well.10

Moreover,brokers hroughou Ohio could operae unscreened or criminalrecords. In oo many insances loans were made based on infaedappraisals and inadequae documenaion. In ac, unil 2007appraisers in Ohio were no required o be licensed. And alhoughlocal leaders recognized he dangers early on, hey were unsuccess-ul in passing laws o conrol predaory lending back in 2004.11

oday, despie increased enorcemen and some long-awaiedani-predaory lending rules now in place, consumers sill need

beter proecions. In paricular, hese proecions should ocuson low-income, less sophisicaed consumers, operaing in an

imperecly compeiive marke where morgage producs arecomplicaed and risky. elying on disclosure mandaes andnancial educaion programs has proven no o be enough.However, dening and implemening hese proecions arechallenging asks, and as i should be, are currenly a he hearo heaed debaes in policy circles. Te experience in Clevelandsuggess appropriae incenive schemes and monioring as oolsor consumer proecion.

Incenives:I is known ha innovaion oupaces regulaion. Wihsecuriizaion, he morgage-relaed nancial marke operaedunder an originae-and-disribue model, in which incenives were

misaligned among brokers, originaors, and morgage holders.eorms regarding expansion o assignee liabiliy provisions andseting broker ees independenly rom he ype o morgage origi-naed can help align incenives beween all paries and are likely oimprove oucomes. eorms applied equally o loan originaors,morgage brokers, and lender employees (i.e., loan ocers andmorgage bankers) may be mos eecive. Accord

facing the foreclosure crisis in greater cleveland: what happened and how communities are responding

Documents