Cleveland, OH, United States (AHN) – Some U.S. banks have started to demolish foreclosed properties and are even paying for the cost, which saves the financial institutions from maintenance, taxes and real estate marketing expenses.
In some areas, the properties that were demolished became community parks, church extensions and parking lots.
In Ohio, the company that is charged with razing the foreclosed homes is the Cuyahoga County Land Reutilization Corporation, which was created by a 2009 state law and tasked with creating land banks.
Other states such as New York, Georgia and Philadelphia are using the Ohio model to put up similar organizations.
Lenders and mortgage firms are also donating properties to land banks. Bank of America and Well Fargo said they will donate over 100 properties to land banks. JPMorgan Chase has made regular donations and Fannie Mae donates about 30 properties monthly.
While disposing of unwanted properties on their hands, the banks are also battling lawsuits over securities fraud claims filed by states and municipalities despite the lenders having settled some of the complaints.
Bank of America and JPMorgan are negotiating an agreement with state attorneys general and federal officials that would fund loan modifications for homeowners and set requirements on how the banks should conduct foreclosures.