Cuyahoga County Creates Land Bank to Address Foreclosures

Cuyahoga County Treasurer Jim Rokakis estimates that there are around 35,000 vacant structures in Cuyahoga County. Of these, there are at least 15,000 properties awaiting demolition, at an estimated cost of $150 million.

As Rokakis told the Plain Dealer, "Vacant and foreclosed properties are destroying confidence in our neighborhoods."

To combat the foreclosure problem, Rokakis helped to establish the Cuyahoga County Land Bank, which he says will be up and running in April.

The land bank is a non-profit entity that will intervene in neighborhoods suffering from flipping, foreclosures, and speculative investors. Rokakis cited the widespread problem of investors purchasing properties in bulk from lenders whose primary objective is to unload their assets efficiently. The land bank would seek to purchase properties that are not being absorbed by the market.

"The belief is that the land is valuable," says Rokakis. "If you hold it and aggregate it, there's hope for the future." The land bank will demolish decrepit properties, and mothball or sell other properties.

The land bank will be a non-profit corporation comprised of seven board members. It will be funded from the late payment penalties assessed to delinquent property owners.

"Every percentage point decrease in value will cost the City of Cleveland's General Fund $1 million," says Rokakis. "The numbers are ugly for every community ... we need to do something now!"

It's important to note that in many cases, the decline in sales prices in our communities is due to the impact of vacant and foreclosed homes selling for cents on the dollar. If we can address foreclosures, this is one key way to improve our neighborhoods - and to rebuild value and equity.

Kudos to County Treasurer Jim Rokakis - and others that have quarterbacked this issue - for establishing the land bank. It can only help to stabilize our neighborhoods as we navigate the future that lies ahead.

Good News for Homeowners: Ohio Restores Residential Solar Grants

The Ohio Department of Development (ODOD) has resumed funding for solar residential electrical projects, which, combined with the federal program, is designed to make home solar systems more affordable and to reduce the payback time from 30 to roughly 10 years. The program is administered by the Ohio Department of Energy, which will award grants for residential solar projects at the rate of $3 per watt, up to $25,000. The monies will come from the ODOD advanced energy fund, which receives approximately $5 million annually from a 9% per month fee on the electric bills paid by customers served by an investor-owned utility. Municipal systems customers do not pay this fee and are not eligible for this program.

The restoration of this program shows that, even in tough economic times, investments in alternative / green energy often make sense. Find out more information here.

Key Bank Gets Aggressive With Mortgage Lending

The market is shifting beneath our feet, and this provides opportunity for some. Key Bank is taking advantage of financing gaps in the marketplace by offering aggressive mortgage programs.

We occasionally share good loan programs with our valued clients, and Key Community Mortgage is one of those programs. In qualified areas, Key is now offering 0%, 3% and 5% down payment options, no private mortgage insurance (PMI), flexible credit decisions, and the option of using seller assistance or a down payment assistance program.

To put this in more concrete terms, you can buy a two bedroom, one and a half bath Clinton Court townhome in a great location in Ohio City, and pay only $927/month. (This payment is based on a sales price of $159,900, down payment of 5%, 30 year fixed rate at 5.875%, APR at 6.020%, monthly homeowners insurance, and 100% tax abatement on improved value).

In most cases, such a payment would be less than the cost of renting an equivalent new home - and with this, the benefits of homeownership are within your grasp.

For more information about Key Community Mortgage and other loan products, please contact us.

Rehab Loan Rates at 2.6% - and Other Opportunities in a Down Market

The new Fannie Mae HomePath Program offers opportunities in the marketplace for those buyers that are looking to purchase a foreclosed home. Doing so may provide a great deal for buyers or investors that are prepared to rehab a home.

Here are some features of this new program:

• Buyers may qualify even if their credit is less than perfect.
• The program is available to owner-occupiers and investors.
• Down payment (at least 3%) can be funded by your own savings, a gift, a grant, or a loan from a non-profit organization, state or local government, or employer.
• No mortgage insurance.
• No appraisal fees.
• HomePath Renovation mortgage may also be available.
• Fannie Mae may agree to pay up to 6% towards closing costs.

Homebuyers that find the prospect of attaining rehab financing to be daunting should consider Cleveland Action to Support Housing (CASH). This innovative non-profit has a thirty-year track record of helping to provide low-interest rehab loans to both homebuyers and investors in Cleveland.

Currently, CASH is offering a 2.64% rate on rehab loans! Not only is such a rate virtually impossible to beat, it also offers buyers a chance to build up equity more quickly in their home, and to save thousands of dollars in interest payments.

Katz and Bradley in Newsweek: Cities & Suburbs Must Tackle Urban Issues Together

In a recent article in the Jan. 26th issue of Newsweek, Bruce Katz and Jennifer Bradley of the Brookings Institution Metropolitan Policy Program argue that America's urban challenges - and opportunities - have crossed city lines and migrated into the suburbs. Our suburbs, they say, now provide more jobs than cities, and have more immigrants. This means that suburbs share, in many ways, the city's traditional role as a job and economic development engine for the metro region.

Katz and Bradley write: "America can't ensure its leading place in the global economy unless we grapple with the problems and opportunities of our suburbs ... suburban governments are being flattened by the housing crisis - they don't have the experience or the capacity to slow the tide of foreclosures or deal with neighborhoods strafed by vacancies."

They argue that the federal government should use "some of the billions in recovery funding to help local governments buy up foreclosed properties and put that land in productive use ... policies need to treat metropolitan areas as a whole."

Katz and Bradley recommend the following:

- Support for regional clusters of high-tech industries and other sectors, which don't gather neatly in one municipality or another

- Creation of walk-able communities and additional public transit to link people in the suburbs with other communities and cities within the metro region

President Barack Obama has argued against an "outdated 'urban' agenda that focuses exclusively on the problems in our cities, and ignores our growing metro areas."

These policy recommendations offer a vision of what's next for America's cities, and have particular relevance for Northeast Ohio, due to the fragmented nature of municipalities within our region, as well as current efforts towards fostering a more efficient, competitive economy in our region.

2009 Housing Market Preview: Good Deals, Low Rates and the Road to Recovery

The image of millions of people around the world celebrating the Inauguration of Barack Obama is a cause for hope. However, as President Obama stated in his bracing address, there are many challenges – and a great deal of hard work – ahead of us. Principal among those challenges is the U.S. economy, and central to our nation’s economic challenges is the housing market.

Here is our summary of a few housing market trends to watch out in 2009.

• The National Association of Realtors predicts that home sales nationally will increase by six percent in 2009, from 5 million to 5.3 million. This is a modest increase, but suggests that in many areas, the market has bottomed out, and will begin its climb towards recovery.
• The volume of new home sales is expected to continue to drop. In many cases, this may be a good thing, because it will gradually reduce the volume of inventory that has resulted from overbuilding within the market.
• Prices have dropped nationally about 12 percent from their peak in 2006. This spells trouble for sellers with little equity in their homes, but as the market levels out, sellers with equity should remain in a relatively stable position.
• The affordability index across the country has increased dramatically. A higher percentage of people with solid income and good credit should qualify to purchase a home, when compared with the market peak in 2005-2006. This is also good news for deal hunters. Savvy buyers will seek opportunities within the market – namely, they will take advantage of price drops from motivated sellers in desirable areas. In some cases, they may even be able to purchase a home for less than its appraised value.
• Low interest rates mean that buyers with solid income and good credit can save thousands of dollars and get a great deal on a home loan. Rates are still hovering around 5%, down from over 6% just a few months ago. Meanwhile, FHA loans require as little as 3.5 percent down.

The wild card in 2009 is government intervention. What will the Obama administration do to help speed the housing market recovery, assist troubled homeowners, and spur home sales? Obama and his advisors have spoken of greater intervention – this could help to further stabilize the market.

Credit Repair 101: Tips for Homebuyers

If you don’t have perfect credit, you are certainly not alone. Research shows that Americans have racked up too much debt, and that this is a part of the economic problems that we face currently. On the other hand, the world that we live in revolves around access to credit, for businesses and individuals, and maintaining access to credit is essential for most of us.

There is lots of information out there about credit repair. The bottom line is that individuals with bad credit must get their spending under control, address late payments and other issues, and be consistent about paying their bills over time.

Now more than ever, having good credit is essential for buying a home, due to the increased restrictions that many lending institutions have placed on home loans. In many cases, homebuyers with less than perfect credit may find themselves unable to obtain the most attractive financing terms – or to obtain financing at all.

What you may not know is that most credit reports contain inaccurate information. A June 2004 study by the U.S. Public Interest Research Group, a consumer advocacy group, showed that 23 percent of consumers had mistakes on their credit reports serious enough to result in the denial of credit.

Consumers’ rights are protected under the Fair Credit Reporting Act. Here’s what you can do:

• Find out what’s in your file. Every U.S. consumer is now entitled to one free credit report annually from each of the three credit bureaus, Experian, Equifax and TransUnion. Visit www.annualcreditreport.com for more info.
• Dispute inaccurate information. You can dispute errors online at the website listed above, or write a letter to all three credit bureaus detailing the dispute. Banks typically use the middle of all three credit scores when assessing a loan application, so this is important.
• Dispute inaccurate information at the source. Contact your credit card company, etc. if they have provided the wrong information.
• Get rid of outdated information. By law, if information such as a late payment is more than seven years old, it is supposed to be removed.
• Protect your credit identity. It is a federal crime to knowingly and willfully obtain a person’s credit report without consent or under false pretenses.

If you are seeking to purchase a home, refinance a home, or obtain additional credit in 2009, make sure that you stay on top of your credit, so that you can obtain the most favorable terms for your loan.