Foreclosures

[Lynn Farris]

Once again I can't believe what I hear. Is Lakewood really trying to speed up foreclosures when the rest of the nation is trying to help citizens caught in this crisis? The last time I posted on this topic, I was hoping from the response that our city council would get off this bandwagon - but the "other" local newspaper is reporting that they are still working on it.

I never thought I would be quoting Ben Benacke but he states today, "Doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest," Bernanke said.

I'm not sure why we are so far out of touch with the rest of the world. Just google Foreclosures, All over the country the government --both Republicans and Democrats are banning together to help people with the foreclosures. But not us. Again the last time I posted the powers that be indicated that Lakewood was different - Lakewood isn't different - it is another flavor of the same problem, bad economy, variable rate mortgages, some mortgages that shouldn't have been made, outrageous property tax.

I hope that our government officials rethink their position. I know most of them and they are caring and compassionate people. I really can't understand their position on this.

Is it really in Lakewood's interest to remove people from their homes? I don't think we need vacant homes. Working with our county to try to help stop the mortgage crisis seems much more intelligent and kind.

[sharon kinsella]

I would suggest that some, not all of our elected officials think the way to fight crime is to get rid of "undesirables".

From the rhetoric I saw bandied about last summer by many of the people who run for office and some other Lakewoodites on this board and at public meetings, it doesn't surprise me at all.

Many people tend to criminalize poor or economically challenged people instead of laying the blame at the foot of the swindlers.

Have at it people.

[Jim O'Bryan]

I would suggest that some, not all of our elected officials think the way to fight crime is to get rid of "undesirables".

Sharon

Of course it depends on what the term undesirable means.

There are trends in Lakewood as underlined by the Prism Report, that we need to try to buck and change.

The city has a long rich history in forcing people out, for anything from cheesecake to stained glass windows. Who can forget the friendly neighbors waving Otto Lombardo's tax papers around at public meetings.

But the foreclosure problem has hit all areas of the city. Last night I was with some friends in Lynn's neck of the woods and the talk was foreclosure in Clifton Park!

At the same time I know for a fact that sometimes foreclosures can go on for ever, and even longer. I have gone with the police to serve papers on homes owned by parties in other states that might not have ever seen the house ever. Bought on speculation in a strong market.

It is a tough question and a tough problem. The question will be, does the foreclosure in Clifton Park get treated the same as the house owned by the Florida speculator. Or does the homeowner living in the foreclosed house get help, while we run out the speculators?

After walking through Slavic Village, it is interesting and scary. People buying up blocks of homes never seeing them. The all have signs on them, $500 down $295 a month. The scary part is many of the burned downed homes have that on them as well.

It will get tougher, there will be more foreclosures.

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[dl meckes]

How slowly would we want the city or county to move on an abandoned house with a caved-in roof?

[sharon kinsella]

That's not what I'm talking about DL.

I think Jims conjecture comes pretty close to it.

Abandoned properties. That should be resolved one way or another.

But some foreclosed properties still have the families living in them. These are not well off people for the most part.

That's the test.

[Mike Coleman]

It is true some properties in foreclosure have people living in them. Some are owner-occupied and some are rentals.

Q. Why should a renter (either private or the government) pay rent to a landlord who has no intention of paying his loan or his or her property taxes?

[Jim O'Bryan]

It is true some properties in foreclosure have people living in them. Some are owner-occupied and some are rentals.

Q. Why should a renter (either private or the government) pay rent to a landlord who has no intention of paying his loan or his or her property taxes?

Mike


Fascinating question.

I think you might have hit on something.

What if the city could step in and grab the rent. Similar to a rent strike where the renter pays their rent on time to the city, while the grievance is being handled.

Then if we took it farther, would it be possible to accumulate this money over time and use it as a possible down payment for the home by the renter?

I think these are things the city really needs to look at now, as more and more homes go into foreclosure.

What if the city could grab them, offer them at ZERO interest to fire, police, teachers, etc.

FWIW


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[Jeff Endress]

Mike

I've dealt with an increasing number of tennants who end up getting evicted after a Sheriff's sale....Even if you had a valid lease, the foreclosure essentially voids it.

In a foreclosure, the tenants are generally served with a copy of the complaint. They most often know that the place is being foreclosed. And most, upon being served with notice simply stop making the rental payments and wait out the process and upon sale, get a notice from the buyer (bank) to vacate.

Jeff

[Lynn Farris]

Let me remind you, you only have to miss 1 payment to have a problem.

A lot of people out there have been downsized or lost their jobs. It is hard to negoitiate back payments. You miss one payment and you aren't talking to your friendly banker at 1st Federal of Lakewood - these banks may be controlled in China or Saudi Arabia. If you can't pay in full they will return your money.

Think about your parents - they get sick, they pay the doctor bill or the hospital bill and they run short on their mortgage. They may be in danger of losing their home. A lot of people were encouraged to refinance - there was a period a few years ago where you were innundated with refinance offers. I'm sure many people got suckered in with that scheme.

The big landlords I'm not as worried about. But the family with the parent who lost their job and in this market is taking a little longer than before to find a new one, or the senior who paid the hospital before the mortgage. I also know that some people are trying to sell and the market is slow.

These are people that are great contributors to the fabric of Lakewood. They hit a bad spot. I hope the council has the compassion of the rest of the country rather than trying to kick them out.

BTW, DL, the case of a roof falling in is a building dept. matter. Homes that are abandoned and a danger fall under a totally different category. They had be handled by a police action or spot blight.

[dl meckes]

That's not what I'm talking about DL.

I think Jims conjecture comes pretty close to it.

Abandoned properties. That should be resolved one way or another.

But some foreclosed properties still have the families living in them. These are not well of people for the most part.

That's the test.

Lynn's comment ("Is Lakewood really trying to speed up foreclosures when the rest of the nation is trying to help citizens caught in this crisis?") did not address the difference between homes that are occupied and homes that aren't - or homes with tenants and homes with owners who are behind in payments.

There's a huge difference.

[Jim O'Bryan]

A lot of people out there have been downsized or lost their jobs. It is hard to negoitiate back payments. You miss one payment and you aren't talking to your friendly banker at 1st Federal of Lakewood - these banks may be controlled in China or Saudi Arabia. If you can't pay in full they will return your money.

Lynn

This problem is big and only going to bet worse. It is the tip of the financial meltdown. There is no event on the horizon that I can see that makes any of this better.

Doctor bills, credit cards, schools, entertainment, then the mundane stuff like fuel, food, taxes, etc The USA is in meltdown mode, as is the region. We are lucky, a clean, safe walkable city will hold some value, especially near fresh water. (I am sure Costa has something on this)

One funny(?) topic last week around thee cooler was, the Canadian bailout of National City. The question was posed, "I wonder how many properties National City has loans, on that border on the lake? Could America, lose the Great Lakes or at least access to them?


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[Lynn Farris]

I totally agree with you Jim. But we can bail out Bear Sterns. But our council wants to foreclose more quickly on Grandma and Grandpa or the neighbor that just lost his job before he can find a new one?

We don't need to make it worse, we can work together to make it better. Remember Jimmy Stewart in It's a Wonderful Life. We can work to make a city like he envisioned or we could work to have a Potter's Field.

I know you Jim, you are a man of compassion. You want to be Jimmy - not Mr. Potter. One of the reasons that I love Lakewood so much is that we all want to make a city where everyone can reach their dreams. We are only as strong as the weakest member.

[Jim O'Bryan]

I know you Jim, you are a man of compassion. You want to be Jimmy - not Mr. Potter. One of the reasons that I love Lakewood so much is that we all want to make a city where everyone can reach their dreams. We are only as strong as the weakest member.

Lynn

Thanks for the kind words, but Bear Sterns fall under, no over the the Donald Trump syndrome. To big to let fail.

However I have to think, the greed in the country the past ten+ years is coming home to roost. But this is where I defer from Jimmy to Mr. Potter. People have to read contracts, people have to understand credit, people have to become responsible again.

There are so many different problems in play here right now, it is hard to separate the chaff from the wheat.

Example: How do we handle the couple that overbought, then maxed out their credit cards? Are we bailing them out on their home, or on all those drinks at the club? Does it matter?

Right here on this forum we have read of people that claim, the next round of taxes will make them have to leave their home. Did they over buy? Were they so short citied to think these days were not coming? How do we bail them out when they stop paying taxes, and fail?

So right now we have high gas prices, and higher food prices. These are never coming down, unless by some trick, like the repeal of the gas tax for summer. Then we have the tightening of the money supply, because of the borrow and pay later mentality, then add in home sales slump, and the panic with banks, and it gets real ugly. No relief in site for any of this no matter where you live. We have not even mentioned who holds the notes, on Americans. Chinese, Europeans, and even Canadians. They have no allegiance to keep America financially solvent, if anything, the collapse is in their long term interest.

While some will say they need us they need to keep the USA solvent, nothing is farther from the truth.

In my opinion, we have even got to the bad part yet. This will get very ugly, and I fear very quickly. Gas will hit $4 before summer and maybe $5 by end of summer. A gallon of milk will hit $5 as well. If someone can tell me how this will turn around, I am all ears.

The good news, rentals will fill up. Lakewood is still perfectly situated for the new third world America. Fresh water, walkable, clean, safe, fun. It will not be bad here.

FWIW


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[Lynn Farris]

Jim,

I don't question what you are saying. Many people made bad financial decisions. However the number 1 cause of bankruptcy in this country is medical issues. And there but for the Grace of God it could be any one of us.

However, not debating the issue of why people have financial problems.

Why does Lakewood feel the need to speed this up? Do the financial experts on council feel that they have more data than Fed Chairman Ben Bernacke who thinks this is a bad idea?

Do they have better economic advisors than Clinton, McCain or Obama? I question it.

I don't understand why council thinks this is better for Lakewood to speed this up - when most economist believe that this is wrong for the rest of the country.

Congressman Franks is going to hold hearings on why the banks have credit - but they are not making it available for people to buy homes in mid May. Of course that is another correlary issue.

I agree with you about more rental units coming as a result of this. For the most part, it will be middle class people that lose their homes and the rich out of town slumlord will be buying them up at sheriff-sale prices. It is the middle class who made this country strong and I fear that we are losing the middle class. We are going to become a country of rich and poor. Lakewood is a strong middle class city. Don't we want it to stay that way?

[James Mullen]

I have read a lot of the postings on this particular topic. I haven't read anyone point to the fact when these homes get foreclosed on and they go to the sheriff sale, they are more times than not bought back by the bank that financed the property. As a realtor, I will tell you that this is the most common outcome of the forclosure crisis. What happens from there is the bank then enlist a local real estate company to sell the home for at least what they paid at the sheriff sale. This wide spread thinking that it is investors who are gobbling up these properties isnt necessarily true in a community like lakewood. The reason being is the properties are still worth decent money to the bank, unlike the properties that are being bought up in areas such as slavic village and east cleveland. These properties go at auction for less than 10,000 dollars.

What I have seen, and I live in a foreclosed home I purchased over a year ago in Lakewood, is destruction. We can feel bad for these people that get their home forclosed on, but most of these people do not just walk away and lock the door, they destroy the home they live in, as a way to pay the bank back for giving them such a terrible loan. I encourage anyone on this board to take a saturday afternoon and go look at 10 former foreclosed now bank owned homes, and look at the condition they were left in. I would be willing to take you around and show you.

I am not sure what Council has proposed is the right direction, but I do believe the quicker the homes are dealt with, the less chance their is of them becoming major rehabs, and there for issues for the city and residents.