As if the foreclosures alone weren’t wreaking enough havoc on our economy, we also find out the whole process is starting to hurt our local cities in other ways we didn’t imagine:
Cincinnati wants Deutsche Bank and Wells Fargo to pay for what officials say is neglect of foreclosed-upon properties that's worsening blight in city neighborhoods.
The banks own more than 100 properties in Hamilton County.
Representatives appear often in local courts to prosecute foreclosure actions against property owners, the city says in a lawsuit, but don't show up when Cincinnati asks them to maintain abandoned properties titled to them. The city wants repayment for boarding up, demolishing and the other work done to Deutsche and Wells Fargo properties. The suit didn't specify an amount.
It really upsets me when I hear people on the right try to say the foreclosure problem is from greedy people trying to live outside of their means, and we should let them suffer. Sure there are a lot of foreclosures that are the product of people over-extending themselves, but just ignoring that leads to these costs being passed onto struggling local governments. Not only that, but it also effects the former neighbors of these foreclosed homeowners. People sit there and pay their mortgages on time, take pride in their home ownership and try to make something good out of the largest investment they will most likely ever make. In turn, they get rewarded with lower property values, because of a foreclosed house turned abandoned by the bank, now devaluing up their neighborhood.
I got a feeling the lawsuit being brought on by Cincinnati is only the start of it. We will see more cities follow suit (no pun intended) down the road as they realize how much this nightmare is costing them. Then the banks will want to recoup the costs of these lawsuits and having to actually maintain the properties they couldn’t wait to foreclose on. Of course the banks are only worried about their own well being. Why should they worry that your own property value is also being decreased, or that your local government is having to absorb some big costs associated with the foreclosures?
Pandora’s Box is just now opening, and without interaction by Congress, in the form of a homeowner bailout/rescue, we will be facing a vicious cycle that will continue for some time to come and cost all of us more than we could imagine. Until that happens, merry Christmas from the Bush/Republican economy.
(cross posted at IntoxiNation)