November 06, 2007

BBC: Cleveland "Sub-Prime Capital of the United States"

THE BBC HAS PUBLISHED a fascinating account of how the sub-prime lending crisis is plowing through the greater Cleveland area like a really nasty case of necrotizing fasciitis. According to the corporation, one out of ten homes in Cleveland is now vacant and entire neighborhoods are falling apart as the houses in them are foreclosed upon, boarded up and summarily vandalized.

Perhaps most astounding are the graphics the BBC has compiled, showing the horrific economic carnage. In huge swaths of the city and its inner suburbs, at least 57 percent of the mortgages are sub-prime, and entire sections of greater Cleveland appear to have been foreclosed upon. I was talking about this at work with a friend of mine, and he remarked on a chilling change in economic conditions that has occurred as a result. The old saw has it that lenders don't mind offering mortgages because even if the loan goes bad, they still have the house as collateral. But what happens if you can't sell the house? It sounds as if that's happening in Cleveland right now.

Here's another map from Case Western Reserve University showing the percentage of bank-owned homes in the greater Cleveland area. In some communities this is close to ten percent.

Take a look at the maps and graphics. They show a city that is flat on its back.

Posted by Benjamin Kepple at November 6, 2007 08:51 PM | TrackBack
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