The problem of government, bank and tax foreclosure homes seems unending in several areas of the U.S., including Cleveland, Ohio. The city's foreclosure concerns were not helped in any way by an appeals court's decision to reject the city's case against banks for their alleged role in issuing subprime loans that contributed to the housing market crisis.
The court's decision ended the city's hope of collecting foreclosure-related damages that would have been used to help homeowners who lost their properties to Cleveland home auctions. The city's attempt to bring their case to trial was snuffed by the 6th Circuit U.S. Court of Appeals' rejection of its arguments that banks should be held responsible for foreclosure-related problems in the city, including neighborhood blight and rise in crime rates.
Cleveland has accused banks of playing a direct role in the decline of communities in various areas of the city and the state since it allegedly participated in putting thousands of homes under Ohio foreclosure auctions. However, the three-member court panel disagreed and voted against the case.
The city initially filed a lawsuit of public nuisance against several banks and mortgage firms in Cuyahoga County on January 2008 in an attempt to bring so called abettors and aiders of subprime mortgages that caused thousands of residential properties to end up as bank and tax foreclosure homes. The city has asserted that these banks provided capital to lenders and were responsible for offering subprime loans as securities.
Officials further argued that this led to homeowners defaulting on their subprime loans, which left thousands of properties vacant and abandoned that not even people who purchase foreclosed houses are interested to buy. Cleveland further alleged that investors were left with worthless securities because of these subprime mortgages.
Lawyers for the city have stated that banks' actions caused a nuisance that cost the city tax revenue losses worth millions and forced the area to spend huge amounts of money to demolish and board up abandoned and vacant properties. The first and second lawsuits were both rejected on the basis of the city's failure to provide proof that there is a direct connection between banks' activities and government, bank and tax foreclosure homes and the damages claimed by the city.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.