 Last weekend I spent time in Ohio (the Cleveland area) visiting family and my sick grandmother. I've been hearing so much about the housing market fallout in that area from virtually every media, editorial, and blog outlet. I finally had a chance to see first-handedly what some are calling the "subprime crisis capital of America". Much to my expectation, "For Sale" signs dominated the landscape like headstones or silent marks of death. Many signs bared hopeful little tiles claiming a "Reduced Price" or "Priced to Sell" as if to resuscitate life back into the area. "What the hell happened hear?" I thought to myself. Certainly this desolate market wasn't just a result of irresponsible borrowers. After more research, I found that this was indeed much more than reckless homeowners. According to CNNmoney.com, Cleveland got hammered because lax governmental oversight from the state allowed Wild-West lending. "No one was watching," says Jim Rokakis, the Treasurer of Cuyahoga County in Ohio. "There was no sheriff in town. The state legislature was dominated by banking interests." This long-term lack of accountability allowed lenders to make bad loans, including ARMs, virtually unchecked. Just recently, Cleveland and Cuyahoga County decided to clean up their act and sue 21 major banks and mortgage companies. Some big name companies being sued include Countrywide Financial, J.P. Morgan Chase, Washington Mutual, and Merrill Lynch, just to name a few. Pressing for justice and reform, Cleveland's Director of Law Robert Triozzi says, "The mortgage companies are going to be held accountable. Mayor Jackson said the lenders signed off on deals that they knew should have never been made." Regardless of the lawsuits and lender transgressions, job loss in Cleveland and the surrounding areas stand at an all time high. Seeing the fallout firsthand I can honestly tell you that it's going to take much more than a few lawsuits to get this area back into shape. (Written by: K. Skowronski)
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