海角大神

Banks bulldoze houses, despite millions being homeless

Bank of America and others plan to raze repossessed, vacant homes in some cities. Is demolition really an ethical solution?

In January of 2008, Bank of America CEO Kenneth Lewis announced that his company had the 鈥溾�� to buy Countrywide Mortgage for the amount of $4 billion.

鈥淐ountrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation鈥檚 premier lender to consumers,鈥� Lewis said.

Now with Lewis long gone, Bank of America (BoA) owns a glut of abandoned houses it can鈥檛 sell. So the largest mortgage servicer has decided to bulldoze some of its inventory. And BoA isn鈥檛 alone. Wells Fargo, Citicorp, JP Morgan Chase and Fannie Mae have started knocking over a few of their repos already. Lindsey Rupp for Bloomberg,

The biggest U.S. mortgage servicer will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property. The bank has similar plans in Detroit and Chicago, with more cities to come, and Wells Fargo & Co. (WFC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Fannie Mae are conducting or considering their own programs.

鈥淭here is way too much supply,鈥� said Gus Frangos, president of the Cleveland-based Cuyahoga County Land Reutilization Corp., which works with lenders, government officials and homeowners to salvage vacant homes. 鈥淭he best thing we can do to stabilize the market is to get the garbage off.鈥�

Last May, I Detroit mayor Dave Bing鈥檚 plan to鈥� right-size鈥� the motor city by razing complete neighborhoods and speculated that the idea might catch on.

With millions of vacant homes and commercial building sitting empty around the country, this is an idea that could catch on. Don鈥檛 laugh, after all the and poured milk on the ground in compliance with the to support prices even as people where starving. Most farmers at the time couldn鈥檛 afford not to take the government money.

Is it too far-fetched to think that Washington, in yet another way to bail out the banks, would pay financial institutions to knock down repossessed homes and buildings? This would cure the glut, clean up public nuisances and blight (like the Romney place), with the added benefit of helping out homebuilders. Plus, good high-paying jobs knocking down buildings would be created: a right-sizing of employment if you will. This is a win-win-win-and then some policy.

BoA will donate and bulldoze 100 houses in Cleveland, 100 in Detroit, 150 in Chicago and may donate and detonate homes in nine other cities. And if you thought some federal money was lurking somewhere in this story, you鈥檇 be right.

The lender will pay as much as $7,500 for demolition or $3,500 in areas eligible to receive funds through the federal Neighborhood Stabilization Program. Uses for the land include development, open space and urban farming, according to the statement.

鈥淣o one needs these homes, no one is going to buy them,鈥� said Christopher Thornberg, founding partner at the Los Angeles office of Beacon Economics LLC, a forecasting firm. 鈥淏ank of America is not going to be able to cover its losses, so it might as well give them away and get a little write-off and some nice public relations.鈥�

No one needs these homes? Just as FDR鈥檚 administration didn鈥檛 care about those starving during the depression and destroyed foodstuffs in an attempt to raise farm prices, the current administration doesn鈥檛 care about the millions of homeless who could use one of these roofs that are being bulldozed over their heads.

Warren Buffett says 鈥渂low up a lot of houses 鈥� a tactic similar to the destruction of autos that occurred with the 鈥�cash-for-clunkers鈥� program.鈥欌�� The hope is to raise used home prices as 鈥溾�� did for the used car market.

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