Subprime loans, that helped sink the economy not so long ago, and the bargain-basement sales of foreclosed homes by banks and mortgage lenders, is taking a big toll on the city of Detroit, a Detroit News report show.
The combination has left miles of blight in the city and a half-billion-dollar liability, Christine MacDonald and Joel Kurth write at The Detroit News.
You may recall subprime loans, which initially provided cheaper mortgage payments, which grew substantially down the road, resulted in scores of foreclosures across the country, including Detroit. Many people couldn't afford the bigger payments and lost their down payments and homes.
The News' special report on Detroit states:
The Detroit News scoured thousands of property records to catalog the conditions of 65,000 mortgage foreclosures since 2005. The investigation shows for the first time the extent of damage to neighborhoods and the bill Detroit inherited when foreclosed homes were left open to destruction.
The toll is massive: 56 percent of mortgage foreclosures are now blighted or abandoned. Of those 36,400 homes, at least 13,000 are slated for demolition at a projected cost of $195 million, The News found. The city lost another $300 million in tax payments from foreclosed homes that Wayne County seized for nonpayment of taxes.
