Cleveland's Land Bank Fights Blight of Foreclosures
By working with lenders to share the burdens of abandoned and foreclosed homes, the city's land bank has helped to reduce the blight of vacant homes.
"When the land bank started two years ago, Frangos thought the group would have to pay its demolition bill from its own budget. But then the economy worsened and the foreclosures piled up. Lenders stuck with crumbling houses found themselves on the hook in the Cleveland Housing Court for hundreds of thousands of dollars worth of code violations.
The Cuyahoga County Land Bank, a quasi-government corporation, offered lenders a deal: We'll take your worst houses, if you pay to knock them down. This year, Fannie Mae and some of the country's biggest lenders - including Bank of America, Citibank and Wells Fargo - will help pay for half of the land bank's 700 scheduled demolitions.
Lenders pay $3,500 to $7,500 per house. Wells Fargo's Russ Cross says it's a sensible and responsible business plan."