A wave of foreclosures and evictions is about to sweep the United States in the wake of the sub-prime mortgage lending crisis.

This could destabilise the US housing market and may also lead to further turmoil in financial institutions, who collectively own $1 trillion (£480.6bn) worth of sub-prime debt.

Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US "rust belt".

It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes.

Many of these homes are now owned by the banks and investment pools owning the mortgages, and the company making the most foreclosures in Cleveland is Deutsche Bank Trust, which acts on behalf of such investment pools.

Cleveland is facing a rising crime wave, and the cost of demolishing the vacant houses alone will cost the city $100m of its tax base.

its a huge mess, it'll work itself out. but its not gonna be pretty while it does.

<<<<<< about 50 miles from cleveland

and this does appear to be the case

things are not good here

I have lived through it in the early 1990's in the UK ... its very distressing ... I lost two houses.

what is derogatory or offensive about the post


i will tell you what is derogatory and offensive

are the azzhole delete happy idiots (to put it nicely)

get over your controlling attitude

deleter without cause should be removed from moderation

is this up for deletion, is it?

LMAO ... how sad.

Robin,
I agree whole heartedly.

There is nothing offensive or derogatory about this post. Simple economic fact. A sad fact perhaps but there never the less.

I dont understand this...so mortgage prices are soaring? No set mortgage rate?

is it a fluctuating mortgage rate?

Sub-prime mortgages carry a much higher risk of default by the borrower than other kinds of mortgage lending.

That is because most of them are "balloon" mortgages (technically known as hybrid-adjustable rate mortgages, or ARMs), which offer the borrower a fixed-rate loan for two or three years, and then switch to a much higher adjustable rate after that.

Many of them are set to switch in the next two years, leaving borrowers unable to afford the higher payments.

There have already been 1.7 million foreclosure proceedings in the US in the first eight months of 2007, and up to 2 million families are expected to lose their homes over the next two years, according to estimates by the US Congress's Joint Economic Committee

ok thank you. So its variable rate...

A mess to some people, an opportunity to some people.

Gypsy, from what I understand - this whole deal is arising from over-eager lending for home buyers that couldn't necessarily keep up with payments (over-extending). Someone more knowledgeable in real-estate can probably kick in with a better explanation...

out sourcing

and

companies moving out

in wooster the 2 largest employers moved out

rubbermaid moved its wooster operations to merge with its texas operation 4digit employment loss

and i can not remember the other company name

of hand but another bunch of jobs lost

then you have the trickle down effect

of those not spending money

and others losing their jobs because of it

i think wooster is about 45 miles south west of cleveland

people go nuts with the deleting thing..its annoying..

...as Belushi already did. Sorry didn't see the response.

thats pretty sad for all those families.....not only losing their jobs but their homes

But I do have to say, if you are looking to buy and if you are stable enough financially - now is a good time.

The effects of our incestuous ties that this government allowed with the US, is starting to have an impact here as well...we have had 10 or 11 interest rate hikes in the two years.

The Reserve bank has once again added a another 1/4 % rate increase...which may not appear to be much, but it is the steady rise that is already affecting over stretched mortgage owner families.

And once again it's the low to middle income owners most adversely affected. I also remember the 80's and the amount of discretionary income of the average families has dwindled notably these past two, three years.

With Drought conditions still holding many of our fruitbowl areas, and grain and meat growing areas, in a death grip, our food prices have doubled in the past two years.

Utility rates have increased, imported products have increased, and I suspect, but please don't quote me, the export industry is starting to lag, except to China and Asian Pacific areas for our natural resources.

Recession?

It's already happening...the rise in the Australian bottlecap, against the greenback, the rise in food, and interest rates...

No matter what pretty colours the governments try to paint it.

We don't have the 'Look over there, it's the illegal immigration tha's causing it' excuse that some are trying to use.

Flat out, we are so closely reliant on the US through John Howard's 'close' ties with George Bush...when the US goes down for the final count...we won't be the ones throwing a rope, we will be doing the dog paddle ourselves.

Tie up with Russia!!