Winter 2012

Responding to the Mortgage Crisis: Three Cleveland Examples

Articles

Responding to the Mortgage Crisis: Three Cleveland Examples

Years before the mortgage crisis fueled by subprime and predatory lending became a national crisis in 2008, this emerging disaster was ravaging neighborhoods in Cleveland, Ohio. Investigations that followed revealed that homeowners were being persuaded to refinance their mortgages and often to finance home repairs and amenities through predatory lending, including adjustable rate mortgages with initial low interest rates (“teaser loans”). The Cleveland neighborhood of Slavic Village was especially hard hit, with massive amounts of mortgage fraud followed by hundreds of foreclosures of borrowers resulting in housing abandonment and widespread blight. Despite these discouraging data, the three examples of responses described in this article give hope that the challenges caused by this crisis can be met and the city’s neighborhoods can be rebuilt even with a reduced population and reconfigured land uses.

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