We are all aware that the economy is bad. It’s real bad. Some of us have jobs and continue on day to day. Some of us are out of work and are relying on savings to get us through until we can find another job. And some of us won’t be able to make the next mortgage payment. What happens when people simply cannot pay their house payment? In one area of Northeast Ohio, they are simply tearing houses down.

In the late 1990′s houses were being built all over the place. Moving into the 2000′s, the pace picked up even more. Home builders were building houses on record pace – and it wasn’t fast enough. Everyone was getting a loan, and everyone wanted a house. From first time home buyers to retirees looking for a place to settle in, homes were being bought at record pace. Because of the out of control demand, the price of the houses was being driven higher. The more people are willing to pay, the more they can sell for. Getting a loan was no problem. Even folks with mediocre credit could get loans.

And that is where the problem began. Many people were getting into loans that they really could not afford. Maybe they could afford it on paper, maybe with no income verification – maybe they could get the loan, but they probably shouldn’t have. Add on to that increasingly bad financial practice; the economy was starting to have issues. Many industries were already starting to feel the crunch and were starting to cut back. This meant layoffs. Companies that had never ever laid anyone off were now forced to.

One community in Cuyahoga County, Ohio has felt the brunt of this turmoil, and it’s not going away anytime soon. They have actually started tearing down houses in order get rid of the houses that are in such bad shape, the banks don’t even want them anymore. People who used to have well paying  jobs now struggle with the decision whether to put food on the table or to pay the mortgage. That is a tough situation to be in. City workers, nurses, business owners have all been affected by this recession in Cuyahoga County. These people would normally just write a check and pay the mortgage just like any other bill. But now the money has run out – there is no more.

So, left with no choice, they simply walk away. They walk away from their life, their home, their dreams – they have no choice. This is were the entire neighborhood and neighboring communities really suffer. Most of these homes have been vacant for six months, eight months – even over a year. Nothing has been done to them. They are deteriorating symbols of what was. As they sit vacant, real estate agencies are afraid to put up for sale signs in fear of scaring potential home buyers off. The number of vacant homes on any given street could out number those that are inhabited.

The bank doesn’t want the house, the owner can’t pay anymore, the city doesn’t want to deal with the vacant property as far as vandals and deteriorating the neighborhood. The city pays the $5,000 – $8,000 to have the house tore down, the bank takes the loss and the owner walks away homeless. This is is happening all over the United States. Not everyone is so quick to tear down property, but the scenario still exists. The only way for this cycle to end is for the banks to step up and recalculate the loan based on real-time market value, and work to keep the mortgage owner in the house.