Foreclosures Reach Himalayan Heights In Summit County

September 27th, 2007

Since 1995 foreclosures are up by 600% in Summit County! In Akron more than half the numbers of properties have been sold at extremely low rates by the banks, according to reports released by a committee set up by Akron City Council. Predatory lending in the sub-prime mortgage category is primarily responsible for this crisis. The committee recommends strong action by the government to follow up awareness education programmes. The predatory lending has been at the root of this crisis – something horrendous and unpardonable.

All house owners cutting across socio-economic lines are affected. Lolita Adair, a real estate agent and chairperson of the committee, has been warning of the gathering clouds since 1990. She describes herself as a ‘people person’ and feels from her heart for the defenseless dispossessed. Such hypocrisy does not tune in with American ideals.

The original plan behind launching of the sub-prime mortgage schemes had been laudable. The idea was to help the Afro-Americans, Hispanics and others marginalized due to bad credit records to improve their standing and start to live in their own houses. But it became a tool in the hands of moneylenders to squeeze the victims nearly choking them to death. At this stage to try to financially educate the ignorant is like giving swimming instructions to the drowning. It is insulting to talk about welfare motives while in reality the motive is nothing but crass greed and naked profit.

The details of the financial toll resulting from foreclosures is still trickling in but looking at the plummeting real estate prices in Akron one does not have to search for answers in figures and numbers. In 10 localities of Akron out of 590 sales, lending institutions were involved in 466 deals. Moreover the sale price was invariably less than the market value. Fannie Mae, one of the giants in the mortgage industry, sold a house on Bank Street, East Akron valued at $45,030 for only$5,000! If this is not banditry then what is?

Adair is optimistic that the study will bring about change and make the atmosphere congenial for bridging the gap between borrowers and lenders. The idea was that the report would alert the people and also make the federal banks (over which the state has no control) feel ashamed to the extent that societal pressure will make them stir and move in the right direction.