Report Details How Subprime Lending, Foreclosures Hurt Detroit
DETROIT (AP) - A published report details how subprime lending and bargain-basement sales of foreclosed homes by banks and other mortgage lenders helped create blight in Detroit.
The Detroit News reviewed property records to catalog the conditions of 65,000 mortgage foreclosures since 2005. The newspaper's investigation found 56 percent of mortgage foreclosures are now blighted or abandoned.
Of those 36,400 homes, the newspaper says at least 13,000 are slated for demolition at a projected cost of $195 million. The city lost another $300 million in tax payments from foreclosed homes that Wayne County seized for nonpayment of taxes.
Steve Tobocman, former co-director of the Michigan Foreclosure Task Force that was formed to respond to the crisis, says: "There's an ironclad correlation between subprime lending and abandoned, blighted and in-need-of-demolition houses in Detroit."
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