June 18, 2008

Cities Take Matters Into Their Own Hands

The clear message from city governments across America is that they are not willing to wait for the Federal government to solve the foreclosure crisis; they are taking proactive measures to help their own communities in every way they can.

In Philadelphia - a new court order prohibits Sheriff’s from evicting those in foreclosure unless a last ditch effort is made by the lender and homeowner to work things out.  In January, the city of Cleveland sued 21 major investment banks and lenders; claiming their deceptive and subprime lending practices had created the current morass.  The city of Baltimore has also sued Wells Fargo Bank over similar claims. 

Still other cities are addressing the issues of property value decline due to improper maintenance of vacant buildings.  St Paul in Minnesota has developed a Vacant Building policy - which requires a new property owner to file a report declaring their intentions for the building within 30 days of acquiring it.  There is also a $250 registration fee associated with the filing.

Economic losses of $166B in 2008 covering 361 metropolitan areas were projected in a report released by the U.S. Conference of Mayors last November, but this doesn’t include the unquantifiable losses due to increased crime, homelessness, property value degradation, and loss of jobs relating to the real estate and home improvement industries.   

More creative solutions to this problem include loan programs offered by the cities of Jacksonville FL and Louisville KY, where homeowners can borrow up to $5,000 which will be forgiven if they stay in their homes.  

But the award for the most creative solution goes to Trenton NJ; the mayor of Trenton has asked all pastors to preach at least one sermon on foreclosures.  Asking God for help makes sense in today’s market!

[Photo Credit: MSNBC.com  Rev Medley of New Jersey]