Anatomy of Rapacious Greed - All Boarded Up | WHAT REALLY HAPPENED


Anatomy of Rapacious Greed - All Boarded Up

The New York Times Alex Kotlowitz March 4, 2009

Magazine Preview - All Boarded Up

And in December, just when local officials thought things couldn’t get worse, Cuyahoga County, which includes Cleveland, posted a record number of foreclosure filings. The number of empty houses is so staggeringly high that no one has an accurate count. The city estimates that 10,000 houses, or 1 in 13, are vacant. The county treasurer says it’s more likely 15,000. Most of the vacant houses are owned by lenders who foreclosed on the properties and by the wholesalers who are now sweeping in to pick up houses in bulk, as if they were trading in baseball cards.

“Cleveland is a bellwether,” Immergluck says. “It’s where other cities are heading because of the economic downturn.”

Cold-calling mortgage brokers offered refinancing deals that would let homeowners use the equity in their houses to pay off other debts.

interest rates ballooned after a short period of low payments. Suddenly burdened with debt, people began to lose homes they had owned free and clear.

[...] the banking industry threatened to stop making loans in the city and then lobbied state legislators to prohibit cities in Ohio from imposing local antipredatory lending laws.

O.V.V. IS A TERM OF ART that stands for Open, Vacant and Vandalized.

He also heard that Jackson had alerted the city that there was a foot of water in the basement of the vacant, the result of pipes having been ripped out. (This is common; Brancatelli has seen back water bills for vacant houses as high as $6,000.)

BY MID-2007, IT BECAME CLEAR to Brancatelli that his was a city at the mercy of lenders and real estate wholesalers, who now owned thousands of abandoned properties in the city. Somehow, the city needed to hold these new land barons accountable for their vacant houses, so many of which were in utter disrepair.

The clerk tracked down the trustee on the mortgage, Deutsche Bank, and confirmed that the foreclosure had indeed been withdrawn. Pianka calls these situations “toxic titles.

“We just have to figure out some other ways,” Pianka told me. He has suggested that the city could name corporate officers when prosecuting code violations. He told me that a Cleveland police officer was so angered by all the abandoned properties that he volunteered last month to serve warrants to bank officers should they ever be issued.

ON FEB. 29 LAST YEAR, Derek Owens, a 36-year-old police officer on patrol, spotted a group of young men drinking beer in the open garage of an abandoned house. Neighbors previously complained of teenagers both selling and using drugs in the row of vacant houses on the street. When Owens and his partner got out of their squad car, the men fled. As Owens chased them, one of the men stopped in the driveway of yet another abandoned house, turned around and opened fire. One shot hit Owens in the abdomen, and he died several hours later.

Then, as if thinking aloud, Pianka said, “It is really tough being a city municipality because we’re subject to international banks, national banks, acts of Congress, buyouts of mortgages. . . . We have no control over those entities, so I guess we’re going to have to try to work with you.”

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