BANKS ARE YOUR NEW NEIGHBORS - BUT THEY DON'T LIVE THERE - CALLAHAN'S CLEVELAND DIARY

Bill Callahan, a private concerned citizen (where’s the County in this expose?), has taken a keen, focused interest in minding the "sub-prime" statistics.  

I encourage you to read Mr. Callahan’s Diary [1] (a click will honor those on "in memoriam" way too slightly) and his prescient comment on Realneo here [2] which is copied out of context below:

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Laura vs. Jim [3]

Submitted by Bill Callahan [4] on October 6, 2007 - 6:30pm.

Let me start by saying that I live four blocks from Laura, and have lived here since 1991. Before that I lived for eleven years on West 54th between Clark and Storer.  Homeowner at both addresses. Raised three kids to adulthood at these addresses (the oldest of them was six months old when we moved to West 54th).

I know Laura. She's a good neighbor and friend. I also know Jim Rokakis.  I consider him one of the very few people in local public office who's been willing to put his ass completely on the line to publicize and grapple with the absolute worst disaster to hit Cleveland neighborhoods (and some suburbs) in fifty years.  I'm sorry he and his wife decided to move out of the neighborhood, but so frigging what?

Predatory lenders and their agents now hold title to thousands and thousands of houses in Cleveland, with the number swelling on a weekly basis.  Many of these houses are beyond saving; the only way to make them habitable would be to rebuild (not renovate) them in place.  Brooklyn Centre has not borne the real brunt of this yet -- though we're well on our way -- but Slavic Village, Union Miles, Mt. Pleasant, Hough are in desperate straits.  Go take a look at the little streets between Broadway and East 49th: Barkwill, Frazee, Anson, Dolloff.  Tell me you don't think some demolitions -- as well as some rehabs -- are needed to keep those streets viable for the people who still live there.  Knock on some doors, ask the neighbors.

Or if you want to know how Marie Kittredge at Slavic Village Development feels about it, don't wonder... call her and ask.

Laura writes: "Don't ask for more federal money to 'solve' the problem, by bulldozing the city and blacklisting certain neighborhoods.  Hold the banks accountable for the condition of the buildings and fine them, to restore the buildings." 

Oh yes, so simple.  After the Federal Reserve and the Congress have unleashed hundreds of unregulated mortgage banks and their LLCs from all over the country to collaborate with thousands of crooked brokers, appraisers and "investors" to strip the value from thousands of Cleveland homes, not mention the homes of their neighbors (i.e. you and me), don't look to the Feds for help in cleaning up the damage.  Local authorities should just hold all those banks (and non-banks) in California, Texas, Minnesota, Colorado, Germany, etc. accountable and fine them to restore  the value they've destroyed.   That will work.  Just ask Judge Pianka.

Laura, those banks you're talking about own the houses.  If pushed, they can just tear them down themselves.  Or abandon them without clear title.  Or sell them off to the next round of flippers.  All of which they're doing right now.  The point about demanding some Federal reparations for local communities is to increase our ability to buy some control over these outcomes... mostly by demolishing what has been abandoned and is already beyond rehabilitation, which will cost many millions of dollars in itself.  (In Cleveland, a $7,500 demolition of a negative-worth house creates a $100 vacant lot.) 

We also need Federal re-regulation of mortgage lending, resources and legal mandates to substitute workouts for millions of future foreclosures, criminal prosecution of criminal behavior,  point-of-sale inspections on sheriff's sales, and lots of additional pressures of all kinds on lenders, packagers, securitizers, servicers, etc. to take their own losses and clean up their own damage.  And lots of consumer education.  All of which you'd find that Rokakis has been advocating, if you looked harder or just asked him.

Laura, there absolutely are some people in power in Cleveland who see this human and neighborhood disaster as an opportunity for "slum" clearance.  Some of them live in the suburbs (though not all, I promise you).  Rokakis is not one of them.  You're hanging this label on one of the few public figures who actually understands the dimensions of the foreclosure crisis, has played a big role in getting others see it, and has gotten his personal hands dirty for years trying to stave it off -- apparently just because you don't like his home address.

We have too many real enemies and too few real friends.  Please stop shooting at the friends.