In a shocking move, the City of Cleveland actually got its act together and is suing 21 banks for improper sub-prime lending practices.

The problems created by vacant homes is indeed a major issue in Cleveland and its surrounding suburbs.  Vacant homes not only are magnets for crime but tax revenue is lost because the home is not occupied.  Another major problem with vacant and abandoned homes is maintenance.

Vacant homes are indeed costly for cities to maintain.  After the proper resolutions are passed, city crews can take over maintenance of the properties.  Many of these workers earn $20 an hour or more and have perks only dreamed about in the private sector.  So it is costly for a city to take these workers off of other duties (road maintenance, etc.) and have them maintain private properties.  As a result, their other duties get placed on hold.  Each city eventually gets its money back after the lien on the home is satisfied.

I do have one problem with cities suing banks for improper sub-prime lending practices.  The problem is that such lawsuits assume the only victims are the cities.  These lawsuits offer no relief to the families that have been displaced by improper lending practices.

While I give the City of Cleveland credit for going after these banks, I certainly hope that other cities will follow suit.  And just for the record, Cleveland was one of the few cities that had a local anti-predatory lending law squashed by the State of Ohio.  I’m sure the families that have lost their homes to such loans are thanking ex Governor Bob Taft each and every day they struggle to stay warm and feed their families.

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