Cleveland's expensive foreclosure crisis

The phrase "No good deed goes unpunished" summarizes the ongoing foreclosure crisis. Cleveland performed a lot of "good deeds."

From the Cleveland Plain Dealer:

The city of Cleveland has aggravated its vexing foreclosure problems and has lost millions in tax dollars by helping people buy homes they could not afford, a Plain Dealer investigation has found.

The city provided mostly low-income buyers with down payment loans of up to $20,000 through the federally funded Afford-A-Home program, but did little to determine whether the people could actually afford to keep their homes.

That lack of oversight persisted for years, even as hundreds of loan recipients defaulted on mortgages, many within two years, the newspaper found by analyzing property and loan records covering the period between 2000 and 2007.

For example, nearly half of 584 homes sold by the top three for-profit companies that tapped into the program over the eight years have gone into foreclosure. More than one-third of those homes have sold at sheriff's sale or sit abandoned because banks did not take them back.

And the city is taking a big financial hit on that chunk of homes the banks don't want--when properties are auctioned off by the sheriff, Cleveland stands little chance of recouping what it invested in those houses.

"No good deed goes unpunished" is spot on.

Afford-A-Home is an expensive mistake.

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