December 19, 2009 [The Plain Dealer]
The unprecedented agreement just inked between the Cuyahoga County land bank and mortgage monolith Fannie Mae illustrates how strategic cooperation between agencies is crucial to a comeback from the foreclosure crisis. The deal allows the land bank to buy foreclosed homes from the U.S. government-sponsored enterprise for $1 — easy on a taxpayer pocketbook already ravaged by the housing meltdown.
Even better, Fannie Mae will kick in $3,500 for the demolition of properties that cannot be rehabbed. That won’t cover the entire cost of razing a house, but it allows the land bank to keep that much more money in its coffers for acquisition and reutilization.
Fannie Mae expects to spread the joy of this pilot pact to other parts of the country.
This is the second time that Fannie Mae has used Greater Cleveland as the launching site for new programs. Last year, it allowed the city, nonprofits and potential owner-occupants 15 days to make offers on homes before they were put on the open market, where the more unscrupulous house flippers could get at them.
Fannie Mae is making some amends for flawed lending policies of the past — most notably its easy credit that enticed inexperienced investors to become failed flippers and sent far too many properties into foreclosure.
The U.S. Department of Housing and Urban Development should follow suit.
HUD, nudged by fed-up Cleveland officials, offered last year to sell its eyesores valued at $20,000 or less to the city and to designated community development groups for $100 before letting private buyers have at them.
That $100 is pure bureaucratic greed. HUD should turn those properties over for nothing. And if they can’t be rehabbed, then HUD should contribute to the demolition costs.