Funds from the Feb. 9 servicing agreement that were initially allocated to help struggling homeowners in Cleveland are being diverted to demolish decayed vacant homes that were abandoned during the foreclosure crisis.
The Huffington Post reports that Cleveland is set to receive approximately $72 million of Ohio's $335 million in settlement funds. However, the city has been plagued with thousands of empty and dilapidated foreclosed homes, and the municipal government has already spent $60 million in the past five years in demolishing these properties.
‘We would have much rather spent that money helping families and creating homes rather than knocking houses down that we believe are owned by some very well-resourced banks,’ says Chris Warren, Cleveland's chief of regional development.
The city has already filed several lawsuits against major banks to have them cover the expenses of the demolition, and it is also pursuing code enforcement and debt collection cases against the banks and borrowers who own the rundown properties.