Foreclosures: Columbus Grappling With Aftermath Of Foreclosures

November 28th, 2007 | Tags: Foreclosures

Columbus will have to spend $5.5 million to grapple with the problems left behind by the foreclosure tsunami. The work is extraordinary – something which city fathers have never tackled before on this scale. Doors and windows of abandoned houses will have to be boarded up, weeds pulled out from gardens turning into jungles and flushing out stagnant pools. Some houses will have to be pulled down. New laws will have to be enforced to rein in thieves and looters.

On the positive side the first-time buyers of houses will be taught how to avoid mortgage pitfalls that ultimately end in foreclosures. It will make the people think twice about doing anything that they cannot afford.

The city authorities will have to manage all these objectives with less funds. With the housing industry slump there are less taxes and fees. All this is going to cause pain in the city budget of 2008. The Mayor, Coleman, declares this to be a crisis.

In Detroit, on the following Tuesday there will be a meeting of mayors of six other cities. Also attending the meeting will be executives from the mortgage industry, two members of the Congress and representatives from counseling groups. The agenda will be to bring about cohesion between the public and private sector for the ultimate purpose of saving the victims of foreclosure. Both ends of the crisis will be addressed – how owners can modify loans and how the cities can tackle the rising numbers of abandoned houses that are dragging down the quality of the entire locality.

Columbus had taken the initiative last year by starting a programme called Home Again. It was a 6 year plan with $25 million budget to help low income groups in the city either to stay in their homes or to break down the ones they have abandoned. Despite this the number of derelict houses have risen to 3,200 to 4,100 since Home Again was launched.

In the foreclosure race, during the third quarter Columbus ranked 23^rd among the top 100 cities marked with this stain. From 2006 the actual listings rose by 96%. Detroit ranked 2^nd. While California faced foreclosures because of the over pricing of real estates, in the Midwest the reason was economic blues – and hence the suffering here is more intense. So far no stringent laws against predatory lending has been passed.

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