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March 8, 2007

Home Foreclosures Leading to Urban Blight

Remarkable stuff today in a Federal Reserve hearing about how home foreclosures are already leading to urban blight in some areas. I find it somewhat of a stretch, and I'm guessing that at least some of the blight predates the recent rate increases -- that is, there's an element of opportunistic local officials looking for handouts -- but I'm willing to be convinced otherwise:

"We have found neighborhoods with abandoned homes, 200 at a shot,'' said Louise Gissendaner, senior vice president and director of community development in Cleveland at Fifth Third Bancorp, the 10th-biggest U.S. bank by assets. She said abandoned housing has "devastated our city to a great degree.''

...Fed officials heard stories from Cleveland, Philadelphia, Denver and New York, where neighborhoods are deteriorating as borrowers struggle to pay loans or abandon their homes in foreclosure, a process where lenders take possession of property.

Keep an eye out here for the eventual hearing transcripts.

[via Bloomberg]

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