|"....Laden with thousands of vacant Detroit homes, banks have become desperate to sell, accepting a pittance to avoid bills for maintenance and security. These homes are the root cause of billions of dollars of write-offs for banks on Wall Street and in the City of London, crippling institutions such as Lehman Brothers and Bear Stearns.|
"It's sad - it's sad to see what's happening here," says Tracie Peltier, who runs another local estate agency, 3 Tier Realty, with her husband, Jay. "The longer they keep a house on their books, the higher the chances of vandalism, the chances of somebody going in and burning it up, of someone going in and stripping all the copper out."
America's 11th biggest city has been bleeding people for years. Its population, which peaked at 1.85 million in 1950, has halved to 917,000 and a third of its residents live below the poverty line.
The local economy revolves around America's "big three" car manufacturers - General Motors, Ford and Chrysler - which are in dire straits. Between them, they have cut more than 100,000 jobs in five years and a real prospect of bankruptcy looms as they struggle to cope with high fuel prices and an economic slowdown.
Robin Boyle, professor of urban planning at Detroit's Wayne State University, says the city was at the forefront of ill-fated efforts to encourage home ownership among the poor. "The subprime mortgage industry was in full flag in Detroit," he says. "There was an enormous emphasis, for many years, in trying to assist people with access to home ownership."
According to research firm RealtyTrac, banks have filed foreclosure proceedings on 37,370 Detroit properties in the year to September. Half of the city's home sales in 2008 have been for less than $10,000. Even Aretha Franklin, the "Queen of Soul", faced a fight to stave off foreclosure on her Detroit mansion because of unpaid taxes back in March."
Saturday, October 25, 2008
Detroit: Home of the $1000 homes.
Nation: and the star of subprime mortgages for the poor going out of control.