Home values saved one demolition at a time

Media Reports News

Home values saved one demolition at a time

August 29, 2011 [UPI]

CLEVELAND, Aug. 29 — U.S. lenders say protecting a home is one thing and protecting home values another, so they are calling in bulldozers to make their point.

“We want to make loans on an ongoing basis, and to do so, we need stable to rising home values,” said Russ Cross, vice president of community relations at Wells Fargo.

Banks are finding the most rundown homes they have taken over through foreclosure are, on one hand, not selling and are, on the other hand, accruing huge fines for code violations. There are also neighborhoods where home values are falling merely because the lots next door have an empty, vandalized home and uncut lawns.

WCPN, a National Public Radio affiliate in Cleveland reported Monday that one home in that city had no takers at the give-away price of $5,000.

The lender called the Cuyahoga County Land Bank, which is making deals. They will take over properties with a dilapidated house if the lender pays for the demolition.

“A property like that, on a street that’s otherwise relatively stable … probably needs to come down because it has way too much need on the inside,” said Gus Frangos, the head of the Cuyahoga County Land Bank.

“If you take these pockmarks out, all of a sudden you stabilize the street a little bit.”