Slavic Village is considered the center of the subprime mortgage crisis

January 24, 2008

By Thomas Ott and Michael O'Malley (View author info)
Copyright 2008 Cleveland.com

JUST AS THEY VISITED Ground Zero after 9/11, reporters from around the globe -- Australia, France, Japan, Russia -- have trekked to a Cleveland neighborhood to view the ruin left by foreclosures. But the devastation extends far beyond Slavic Village, where 1,500 houses are abandoned. Nearly every one of the 59 communities in Cuyahoga County, along with many cities in neighboring counties, have taken a hit. The thousands of families forced out of homes are only the most obvious casualties. Municipal governments face a lose-lose scenario. Millions of dollars in property values disappear as families abandon houses. Then governments must spend millions tending the neglected properties -- mowing lawns, picking up trash and demolishing structures. Just about every institution feels a pinch. School officials fret about eroding tax bases, banks lay off hundreds of workers, and home builders scale back construction plans. Real estate agents watch sale prices plummet. Last month, the Jackson administration sued 21 Wall Street investment banks in a bid to recover hundreds of millions of dollars in damages from foreclosure. The lawsuit accuses the banks of creating a public nuisance by irresponsibly buying and selling high-interest loans.

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