I had to take out a 2 million dollar loan on my truck for this, so I hope it's worth it...
Posted on 01/27/2008 5:03:23 PM PST by traumer
The streets are empty. Trash rustles down the road past rusted barbecues, abandoned furniture, sagging homes and gardens turned to weed.
This is Shaker Heights, a suburb of Cleveland and a town ravaged by the subprime mortgage crisis roiling the United States.
Faded "for sale" signs sit in front of deserted houses. The residents are gone, either in search of new jobs after the factories shut down, or in shame after being evicted for missing their mortgage payments.
A red, white and blue American flag flies over windows and doors which have been boarded up to keep the drug dealers away.
Thieves have stripped many homes of the plumbing, the doors, the windows, the aluminum siding.
The police station parking lot is full. The officers, who have seen their numbers triple since 2006, are coming back from their rounds. They speak of installing alarms in some of the homes claimed by squatters.
At 9422 Chagrin Street, a hand-scrawled sign attached to a window indicates someone lives there: "Please Used."
After three rings of the bell, Sarah Evans, 60, opens the door with a mixture of curiosity and alarm.
She says she is one of the last people left on the street. And she is on the verge of losing this two-bedroom house in which she has lived for more than 30 years because she simply cannot afford her monthly payments.
It is a complicated story. She refinanced in 2003, but did not realize the document she signed included provisions to radically increase the interest rate.
She stopped making payments in 2006 and shows her unpaid bills totaling 24,000 dollars.
Her bank is in the midst of eviction procedures.
"When folks buy a home they expect to die in it, I guess," she said as she stood outside in the cold. "I had my American Dream but it became a nightmare."
Her words are echoed by the angry barks of the guard dogs pacing behind a chain link fence two houses away that was installed by the new owner: a bank.
The massive parking lot of the Eagle Fresh supermarket is empty.
Behind her till, Myra Bibldwit lifts her head when a bell signals the entrance of a customer.
"Not many folks come anymore. We're used to it," said the 24-year-old cashier, one of the few in the neighborhood who managed to hold onto her job.
In the five hours since she started working today she has served just 10 customers. "Maybe you will buy something," she says with a smile.
Then comes customer number 12.
Laura Johnston, 50, says that her street -- about 10 minutes away by car -- was alive two years ago. Today, half the houses are abandoned.
"Folks could not afford their payments. They were asked to pay loans which doubled. They could not afford it, some lost their job. Lenders were greedy. They threw them out of their homes," she told AFP.
"I'm very upset. I missed my friend Helen. She disappeared overnight. She did not even say goodbye."
There are plenty of cases like Helen. They are called the neighbors who disappear in the night.
For county treasurer Jim Rokakis, the greed of the banks is to blame for this man-made disaster.
"All you needed was a pulse to buy a house. Some loans were written with no money down, no proof of buyer's incomes. They did not even check what people were saying. Most of those folks were jobless," he said in an interview.
"Shaker Heights was the perfect storm: poor folks, unemployed and a desire to get a piece of the American Dream."
My father was a truck driver in Missouri in the 1950’s. He has some great stories about East St. Louis! I make him tell them every time he visits. (He remembers the 50’s better than yesterday.)
Back when I was in grade school, Shaker Heights was held out as a model city of encouraged integration and relative prosperity. What happened?
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OK, who has the B.S. meter gif?
And so he said to the other knights,
You may have my possessions and my goods
For I am moving to Shaker Heights
Where I've got some connections in dry goods
The tune is Greensleeves.
I used to know where it was at but the big bad people who gave me money took it...
Wow. It’s so bad there that Cleveland had to move to Illinois.
Doesn’t anybody ever read a contract before signing anymore?
Wow, slow down.
Shaker Heights used to be an affluent neighborhood. As the economy in Ohio deteriorated and “white flight” increased (note: Shaker Heights is near Hough, a notorious ghetto in Cleveland), housing values fell. Much of Hough, Cleveland Heights and now Shaker Heights is populated by poor credit score households (which is correlated with minorities).
This is the downside of the Fed’s “Affordable Housing” goals where ownership by everyone was pushed. Well, push something too far and this is what happens.
The other day here on FR there was a story about a home invasion in Shaker Heights. Surprised me.
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I thought there was a federally mandated requirement for mortgage bankers closing loans to explain the details of the loan and have the borrower sign a document that they understand.
Here’s the best subprime explanation yet:
http://youtube.com/watch?v=SJ_qK4g6ntM
“Somehow this package of dodgy debts stops being a package of dodgy debts and starts being a Structured Investment Vehicle!”
Chagrin Street? That’s certainly an ironic name for a street filled with failed mortgages.
She must have paid her electric bill because she answered the door bell.
I’m having a hard time feeling sorry for these people. It wasn’t just the banks that were greedy.
Blush
I suddenly remembered the Arch. So on second thought and after consulting a map, I have been there...twice. Last Sept. I drove through on I64 on my way out west and back with a friend.
Sorry to say, it didn’t make an impression. Of course we were traveling with a toddler and an infant, so not much of the trip did make an impression.
That’s pretty much what I thought Shaker Heights was like, too.
This is rubbish. New buyers were vetted and had to show reliable income. The no doc loans were given to existing homeowners with adequate equity, they pulled money out, blew it and could not make the adjusted payments.
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