The Zombies From Wall Street
The crazy loans that triggered the Global Financial Crisis in 2007 have morphed into "zombie mortgages" and they're causing havoc in some American cities. This report explores the legacy of the banking villainy.
In once-proud American neighbourhoods, two-storey houses are being dumped at auction for a few hundred dollars. Some are literally being given away. In Cleveland, Ohio - once America's economic powerhouse - it's almost a daily event. Since the 2007 sub-prime crisis, an exodus of ruined families has drained the city's life blood and changed it beyond recognition. "We've had a lot of homicides this year...we've had a lot of citizens scared", says police chief Brandon Kutz. Homeowners are now being stalked by "zombie mortgages", which leave them liable for property taxes and maintenance costs they can't afford, even if they've left their homes and declared bankruptcy. Meanwhile, 20,000 decaying homes, shunned by banks or buyers, are now being reluctantly bulldozed by local authorities. "It's estimated that the minority community, African-American and Hispanic, have taken a $1.2 trillion hit between 2000 and 2010 to their net worth", says local politican, Jim Rokakis. "We lost the war...this clean up is basically burying the dead."
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