The land bank in Cuyahoga County, Ohio is set to buy its first batch of foreclosed home and lots. The effort is part of the county's initiative to alleviate the devastating effects of the foreclosure crisis.
Included in the purchase deal are six parcels of land in Brooklyn and Cleveland. These cities will serve as test cases for Cuyahoga's nonprofit corporation. The land bank is hoping to purchase about 250 parcels of land by the end of 2009.
It plans to intensify its foreclosure prevention efforts by purchasing troubled loans from lenders at bargain prices to help people remain in their properties by reducing their monthly mortgage payments.
Land bank chairman and County Treasurer Jim Rokakis explained that the mortgage acquired by the nonprofit will then be sold to mortgage-servicing companies or lenders. Proceeds from the purchase will be used by the land bank to help other distressed homeowners.
Rokakis said that the land bank expects to save about 600 distressed properties annually from foreclosures.
Ohio Senator Tom Patton, who sponsored the law that established the land bank, said that the mission of the nonprofit is to help distressed homeowners remain in their houses and reduce blight in the neighborhoods.
However, Republican Senator Tim Grendell said that he likes the land bank concept but believes that the legislature should be the one to approve the nonprofit?s expanded power.
Meanwhile, Rokakis said that foreclosure prevention counselors have told him that there are lenders who are willing to sell $80,000 worth of mortgage for as low as $10,000. Industry analysts said that many lenders are trying to dispose of properties that have lost their values.
Under Rokakis' plan, the land bank would purchase troubled mortgages at discounted prices, help homeowners avoid foreclosure and allow them to remain in their properties, prevent the blight that may further destroy neighborhoods that have been suffering already from reduced property values and institute safeguards to protect holders of the new mortgages.
According to market data, there are 8,800 foreclosure properties in the county since the start of 2009. On the other hand, a business plan has been developed that details the initial program activities and outlines a strategic, long-term vision that will guide the nonprofit as it applies for the $40 million funding it projected to spend in the next four years in the course of the initiative.
The goal of county officials is to focus the land bank's funds to where they will really help and produce significant results.
Many real estate investors are taking advantages from this situation by purchasing foreclosure homes by prices below market value. People can find these opportunities in Ohio by accessing online database of Ohio foreclosed homes.
