A new report from Case Western Reserve University's Center on Urban Poverty and Community Development, Cleveland State University and the Federal Reserve Bank of Cleveland, documents the foreclosure crisis and community responses in Greater Cleveland.
The new report "Facing the Foreclosure Crisis in Greater Cleveland: What happened and How Communities Are Responding," weaves together updated research from Pathways to Foreclosure, Foreclosure and Beyond, and Beyond REO with over a dozen examples of community responses to the foreclosure crisis that range from government reform and legislation to counseling and prevention initiatives.
The report finds that in Cleveland and Cuyahoga County, subprime mortgages, in some sections of the city and suburbs, rapidly supplanted conventional loans as the primary product for home purchases and refinances. By 2005, more than 10,000 foreclosures were filed on residential properties in a single year. A growing number of properties entered prolonged periods of vacancy, stuck either in the foreclosure process or in REO—real-estate portfolios of mortgage companies and servicers.
Untended properties deteriorated and were vandalized. The value of housing stock plummeted, leading speculators to buy REO properties in some neighborhoods in bulk and for pennies on the dollar. Neighborhoods with large African-American populations were particularly hard hit by foreclosures and the negative spillover effects.
But Greater Cleveland did not sit idly by; this report also documents our response. Local governments, non-profit organizations, and community groups mobilized to educate potential home buyers, prevent foreclosures, and rehabilitate vacant properties. They have coordinated their efforts and responded strategically, using data to drive their actions. In addition, groups have worked to mediate issues on-the-ground and at the policy level, working to prevent this crisis from ever happening again.
Co-authors Claudia Coulton (CWRU) and Kathy Hexter (CSU) express the hope that Greater Cleveland’s tale can aid other cities in their own struggle. "We feel there is decided value in sharing our story now, while the crisis is yet unfolding. The value lies in what Cleveland's example can contribute to other communities' efforts to deal with foreclosures and their aftermath."
For more information, please contact the Center on Urban Poverty and Community Development at 216-368-6946.