Empty homes, ruined neighborhoods
Lenders are selling off thousands of houses they've foreclosed on for pennies on the dollar. And now the neighborhoods where those homes are located are crumbling. Mhari Saito reports from Cleveland.
A foreclosure sign in front of a house for sale in Stockton, Calif. (Justin Sullivan/Getty Images)
More on The Economy, Housing - Real Estate
TEXT OF STORY
KAI RYSSDAL: The housing market inched a step closer to salvation today. A key Senate committee approved a plan to give cheaper government-backed mortgages to as many as half a million borrowers. The president's still not sure if he's going to sign it, though. Meantime, one analyst said today banks are going to have to set aside another $170 billion through next year to cover losses on bad credit.
Down at street level, the credit crunch comes in much smaller dollar amounts. Lenders are selling off thousands of houses they've foreclosed on for pennies on the dollar. And, Mhari Saito reports from WCPN in Cleveland, those neighborhoods are crumbling.
MHARI SAITO: Florida retiree George Petrena likes to surf eBay for good deals on piggy banks. But earlier this winter he found a deal too good to pass up: a three-bedroom Cleveland house, opening bid $1.
George Petrena: This house that I bought in Cleveland, it showed that there needed cupboards in the kitchen and it needed a sink. And that was all it showed that it needed. But, of course, I don't know because I haven't seen the place.
I saw it. It had been broken into and the garage was caving in. Petrena was going to fix it up and rent it out. Not anymore. This was the house's second time on eBay. The buyer before Petrena paid $2,000. The guy before that bought it from Citi Residential for $500.
Cleveland's Regional Economic Development Director Chris Warren says lenders are selling off their worst properties to wholesalers. The wholesalers then resell the houses any way they can.
Chris Warren: Part of the wreckage is the multitude of properties left barren with property owners or responsible parties -- so-called responsible parties -- who are unloading them from a desk in New York City, and they're doing this through the thousands of properties.
One large seller in Cleveland is Citi Mortgage. Citi bought subprime giant Argent last summer. Argent was once Cleveland's largest lender. Many of its loans have gone bad and the houses sit vacant. In a written statement, Citi REO says it does not sell houses in bulk but sells off inspected houses to investors who are "positioned to absorb numerous properties."
Gary Kotlarsic: This one, as you can see, the siding is missing, the windows are old, downspout's missing. It's boarded up. But if you've got $500 down, for $350 a month it's yours.
Realtor Gary Kotlarsic is showing me what the houses are like. Some investors resell the houses, often at prices 20 or 30 times what they paid for them. Kotlarsic lives in Cleveland's Slavic Village neighborhood, an area with one of the highest foreclosure rates in the country. He says houses next door are going for virtually nothing, so he and his neighbors can't get anything close to what they originally paid for their own houses.
Kotlarsic: I've had other clients who worked their whole life to have a house, to build equity for their families. They get up in their age and then the family needs to liquidate that to pay for their expenses, and they don't have anything to liquidate. Their value's gone.
Wholesalers say they serve a purpose by putting fixer-uppers back on the market at monthly rates locals can afford. South Carolina's James Odell Barnes says he's helping investors buy 100 bank-owned properties a week in Cleveland and Detroit.
JAMES ODELL BARNES: There's either gotta be people like us, me and my investors, or you're going to have to have a whole lot more bulldozers bulldozing these houses.
Local county government is working on a land-bank proposal that could hold properties banks want to offload. And Citi Mortgage says it's just started working on a pilot project in Cleveland that lets community development corporations get first dibs on the bank-owned houses in their neighborhoods.
In Cleveland, I'm Mhari Saito for Marketplace.
Comments
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04/16/2009
If you are a serious investor or have direct contact with serious investors, I work with Odell Barnes and can provide more properties than you can buy. The average selling price is under $10,000 each. If you are looking for a home for yourself in MI, OH and GA, I might be able to help as we have properties in these states for sale under the Odell Barnes system. Otherwise, I primarily am offering BULK packages to investors. For bulk purchases, I have many other states as well beyond what I listed for individuals. I can be reached at jackg@wb5group.com. Thanks, Jack Garrett
02/12/2009
Wall Street Journal columnist Holman Jenkins suggests that bulldozing vacant homes is a good way to go.
From Traverse City, MI, 11/30/2008
Seriously, how can I get ahold of this gentleman? Odell Barnes does not seem to have any contact information listed anywhere, at least none that I can find. Is there a name for any business he owns, or do you just need to contact him or his partner directly? I'm really interested in what he does, I've seen his story more than once on the local news and on the internet- if this man helps so many people, I'd like to find out if he can help me as well. I'd really appreciate it, I am a disabled person who has been homeless off and on for the last ten years due to the fact that I just cannot afford high priced rent and utilities in my area, especially on a fixed income! I've been through every kind of "low-income" housing program here to no avail. It's tough out there.
From Durham, NC, 11/28/2008
Hello Mr. Barnes,
I was very intrigued by your story on Nightline. My hopes of owning my own home seemed so far fetched that I almost gave up hope. Then I saw your story aired in t.v. I am interesed in your help in buying my first home. I just need to get my foot in the door. Then, I would be willing to repeat this process to help others or to rent properties. I hope you can help. I am eager to hear from you and to restore my desire to own my own hope.
Thank you.
From Arvada, CO, 11/26/2008
Hello Mr. Barnes,
I am very interested in talking with you at your leisure and willing to travel to you. I am a Social Worker, I'd like to purchase homes in bulk and turn them around to refurbish communities and help those that may never realize their dream. I am located in the Denver Metro area and can travel anywhere in the U.S. I'm a quick learner, work collaboratively with communities and can sell anything.
From Metro Atlanta area, GA, 11/25/2008
Mr. Barnes,
I am a licensed Real Estate Broker and I
have people in the Metro Atlanta area
who are on a fixed income and want to
buy a home owner financed, zero down. Please contact me if you are purchasing
homes in Georgia. I can help you sell these homes.
Thank You
Clara Armstrong
678-239-4987 or armstrongrealty@charter.net
From Brooklyn, NY, 11/24/2008
Hello Mr.Barns,
My name is Greta Williams and I am very much interested in the Nightline story aired on 11/18/08. I would like for you to contact me concerning a home in the Raliegh n.c. or in charlotte n.c. areas.
Please contact me at biggretawilliams@yahoo.com. or at 1-718-483-9329.
Thanks a lot
Greta williams
From rochdale village, NY, 11/24/2008
Mr. Barnes,please call me about home in Long Island, 5 bro in New York. Thank you.718-978-6569
From Chicago, IL, 11/24/2008
Mr. Barnes,
I saw your interview on ABC News and would like to know if you have any houses in Chicago or surrounding Suburb. Please send information to : scatsyoyo@att.net. Or I can be reached at,773-488-7759
Thanks,
Y.Geanes
From hudson, NH, 11/22/2008
I used to own a house and sold it with no problems to my loan. I doubt you deal with NH as it is very expensive here but I have to ask if you have any in this state anyway. We live in a homeless shelter and time is almost up. I pray I hear something soon, as our time is limited here. Thankyou Jayne
From ACCRA, 11/22/2008
Dear Sir /Madam,
Good Day! I would like to apply through this medium for your co-operation and to secure an opportunity to invest and do joint business with you in your country.(Internet) has been greatly abused, I choose to reach you through it because it still remains the fastest, surest and most secured medium of communication
I have substantial capital (i.e. US$5,000,000.00) I honourably intend to invest in your country in any very lucrative business venture of which you are to advise and execute the said venture over there for the mutual benefit of both of us. Do note that this fund is my personal inheritance from my late father who founded this company Bizgroup LTD which I work for. The fund was realised after the sharing of shares amonst the shareholders of the company, and I intend investing my share with your assistance in a viable and lucrative business venture.
Your able co-operation is needed to become my business partner in your country and create ideas on how this money will be invested, and properly managed, after the money is transferred to your custody, with your assistance.
Meanwhile, upon indication of your willingness to handle this transaction sincerely by protecting our interests, and upon your acceptance of this proposal, I will furnish you with the full detailed information, procedure involved and mutually agree on your percentage interest or share holding for helping me to secure the release of the deposit and investing the money.
I shall be glad to receive your soonest response and hope to do some good business with you. I do urge you to give this matter the immediate attention it deserves. Do feel free to email me back for further clarifications.
Do have a nice day and I look forward to read from you soon.
Regards,
Dr Wood Addo E MAIL ID dr_wood_addo_24@yahoo.com TEL 00233242930204
From new carrollton, MD, 11/20/2008
Mr. Barnes,
I saw your interview on ABC News and would like to know if you have any houes in my area. Please send information to : rizzla7 @ hotmail.com or I can be reached at,
Cell. 202-251-1977
Thanks,
R. Graham
From Ellenwood, GA, 11/20/2008
Hello. Let me first of all start off by saying that I am so happy that there is someone out here that is interested in restoring not destroying our communities. To make a long story short I have been unemployed for 1.5 years and it couldn't have happened at a worse time I was 6 months pregnant! And to make things worse, I was shortly evicted from my apartment and have been living with my mother and father ever since. They were my blessings on that day and I can't thank them enough! And although my parents are not haggling us about moving, I can tell that it is creating some hostility and tension in the household. It is not only me that is occupying the home but it is also my husband and three children. This makes the occupancy for the house 9!! Now to get to the point I was watching the special the other night and also heard the local radio station discussing the special and I felt as though with things the way that they are he could be just the person to help me and my family. Hopefully this will get to Mr.Barnes and he could give me the advice I need to get started. There is so much more going on that I could discuss but, I was told to be brief. Sooo.... Thanks in advance for any assistance.
Mrs. Simiramis Johnson-Turner
404-246-2699
From casper, WY, 11/20/2008
DEAR MR. BARNS I WATCHED YOU HELP PEOPLE BUY THERE OWN HOMES. I WOULD LIKE TO KNOW IF YOU WOULD BE ABLE TO HELP ME OR LEAD ME IN THE WRIGHT DIRECTION. THANK YOU DEBRA
From Norfolk, VA, 11/20/2008
Dear Mr Barnes,
Viewed your story on ABC News Nightline and was immediately impressed. I am a retired U.S. Navy veteran. My family and I would love the opportunity to own a home here in the Hampton Roads area. Below is my contact information:
McKinley H Mitchell
416 Birmingham Ave.
Norfolk, Virginia 23505
757-423-4247 (Home)
757-353-5985 (Cellular)
E-Mail: mkgb771@aol.com
From Bronx, NY, 11/20/2008
Could you please send me Mr. Barnes' contact information. I am a caseworker in a social services agency. I know so many good and hardworking families that may benefit from Mr. Barnes' opportunity for home ownership. Thank you
From Owings Mills, MD, 11/20/2008
I watched the Night Line story on James Odell Barnes and I am interested in speaking with him. How can I contact him?
From Milwaukee, WI, 11/20/2008
Same for me. I'd like to get in touch after seeing this interview and reading all kinds of other posts and articles around the internet. I would like to get a phone number forwarded to me if at all possible. I can't understand how people can do interviews with him and no publish his contact info. He could have made another couple mil over the next few weeks if they did.
From Port Jervis, NY, 11/20/2008
By Sandra Johnson
From Port Jervis, New York
Mr. Barnes I saw your interview in Nightline on November 18, 2008.
I am a single mother of five. I am very interested in your process and would love to speak with you.
I am in need of help and I believe that you and your partner, Abner McWhorter, would be the answer to my prayers.
Please forward my information to Mr. Barnes or if possible, please forward his contact information to me.
Until December 15th, 2008, please contact me at home or my cell phone. I will not be in the bussiness until then due to major surgery.
Sandra Johnson
Home (845)856-3159
Cell (914)469-4131
Bus (845)856-7788
E-mail sbrisitakas@msn.com
From District Heights, MD, 11/19/2008
I saw Mr.Barnes story on the news a few nights ago and my husband and I are interested in owning our own home either in Maryland, South Carolina, or Georgia. It has been a 21 year struggle and we are still renting.Moved to Maryland for a better chance at things in life for our two children but things are just as bad here if not worst than back home in Ga./S.C. Please, Mr.Barnes consider us for ownership of one of your homes. We can be contacted at SGSEAGO@yahoo.com. Thank you for your time, and may God continue to bless you and keep you safe so that you can keep up the great work that you are doing for all that are less fortunate. MAY GOD BLESS
From Smyrna, GA, 11/19/2008
Hi,
Like the reader below, I've recently heard great things about Mr. Barnes and would love to get in contact with him regarding options for home ownership. Like most Americans, home ownership is a dream that I would love to fulfill. The saddening conditions of the housing market and the world's economic crisis has brought light to the importance of home ownership and I would love to be apart of the generation that has learned from our country's mistake. It would be a pleasure to hear from James Odell Barnes or anyone that works with him.
From Atlanta, GA, 11/19/2008
Hello.
I was just watching the Frank and Wanda show and heard great things about Mr. Odell Barnes. My husband and I and hardworking folks, still relatively young, and would like to become homeowners. We currently rent a home now, but realize that our dream and goal is to BUY. I want to plant MY GARDEN and my husband wants to BEAUTIFY HIS HOME with his own hands. If it is at all feasible, I would like to Mr. Barnes to take time out of his busy schedule and please contact me at 404-717-4349. Please forward my email address to Mr. Barnes as well. Thank you.
11/19/2008
recently watching niteline and saw a piece on james odelle barnes..Is their a way to contact mr barnes?my email address is purpledog51@yahoo.com..been in the military over 20 years and its been difficult buying a house..thanks so much...
From Houston, TX, 11/19/2008
Will you please have Mr. Barnes contact me. My husband and I would like to buy a home and start a program like his.
From Fairbanks, AK, 11/19/2008
Looking for a house near Ft bragg NC
Could you please forward my information to Mr Barnes as well. Thank you
From cicero, IL, 11/19/2008
I recently seen a pieace on niteline on 11/18/08 about Odell Barnes. I know that he is a very busy man, but I would appreciate it very much if my e-mail address was forworded to him. I recently retired and it has been very difficult trying to buy a home. My e-mail addy is rockymares@yahoo.com. Phone 708-209-8357. Thank You so much.
Rachel Mares
From fresno, CA, 11/19/2008
Would like for Barnes to contact me. I would move in a heart beat. Just to have a chance at purchase a home at a good deal. I have no kids of my own but take care of my niece because her mom is in prison. I would love to purchase a home because as a young adult I messed up my credit but now I see how important that is. But saw Barnes on TV and thought maybe he would give me a chance. I work for the Gov. but cant afford a house where I live. But would love to get a chance to purchase one at a good deal. Anyway could you let Barnes know that he can send me email or call me at 559-681-6328 thanks. God is good...Barnes seem like a good guy...bye
From Muskegon, MI, 11/19/2008
Could you please have Mr. Barnes contact me concerning buying a home in Phoenix. I would be moving from MI. designmaster01@hotmail.com. Thank you so much.
From Lauderdale lakes, FL, 11/19/2008
We would like to buy a house could we have a contact # for mr. Barnes, or have him contact us through our e-mail.
From pomona, CA, 11/19/2008
Is there a contact number for Mr. Odell Barnes if so please forward to me.
Thank You
From Atlanta, GA, 11/19/2008
Does Mr Barnes have a contact number or an email address? If so please forward.
Thank you
From Virginia Beach, VA, 11/19/2008
Please contact me James Fant @ 757-754-8901,have Bulk Reo .Please Mr Odell Barnes we can do business.
From Virginia Beach, VA, 11/19/2008
Please give me a call James Barnes,@ 757-754-8901 would like to give you some business bulk deals I am working on I am a Loan Officer. James Fant
From Houston, TX, 11/19/2008
I am interested in buying property in Houston, I am a single woman, and I would like to invest in forclosed homes. Thank you for your time.
From Chandler, AZ, 11/19/2008
I need some help acquiring foreclosed properties here in Arizona. Please forward my E-mail address to Mr. Odell Barnes.
Thank you.
Leoney
From Torrance, CA, 11/19/2008
This is seems like a great thing to invest in and I would like to know how to contact Mr.Barns about investing into his business plan. My email is.....mateo_vanday@hotmail.com
From Westfield, NJ, 11/18/2008
Please forward my info to Mr. Odell Barnes I am interested in buying a home. Or forward his info to me.
Thank you.
Loretta Bowe
973-462-2552
908232-1621
loretta@britts-gourmet.com
From Greenville, SC, 05/22/2008
Banks are only selling off the PROBLEM houses at pennies on the dollar. Wholesalers are selling them to investors who improve them, which in turn helps the community value increase.
We have not seen Pretty houses in Pretty areas being given away at ridiculous prices. Banks are doing everything they can to mitigate their losses and keep shareholders happy
Manager
www.BankREOPropertyDeals.com
From eugene, OR, 05/20/2008
PATRICIA...EXACTLY!!!
From Stacy, MN, 05/20/2008
I can't help but wonder, if the banks would have lost a lot less money, and the empty neighborhood syndrome would have been avoided as a byproduct, if banks/mortgage companies had simply been more willing to refinance or renegotiate with the homeowners, rather than being hard-nosed?
The financial institutions holding/servicing the mortgages, what has been the benefits of their hard-nosed policies?
Huge losses for themselves.
Huge losses in the value of homes nearly everywhere.
An almost unprecedented cooling in the housing market, from buying to building.
An economic slowdown that can't but hurt all the very institutions who refused to be somewhat reasonable.
Well, the by products of being too greedy and unreasonable to recognize your greed for what it is, is that you (financial industry) are going into the tank, and you're taking the entire economy with you. Who will buy homes tomorrow?
All of it could have been avoided, and banks and mortgage companies could have called it "enlightened self-interest". I guess today's self-interest doesn't include enlightenment.
I wish there were more to the story that got told, as a cautionary tale, than what is covered; the frosting on the cake. Why not outline how the financial industry changed since the 1980s? How the Interestate Banking bill of 1994 (?year) and the new bankruptcy provisions fed the belief by the mortgage/financial institutions that there wouldn't be any way so many folks could default..they couldn't file bankruptcy and get relief. What they didn't count on was that when people are driven into a corner called desparation, they will walk away. I think the mortgage co's and their investors (the people who bought those mortgage pools which became CD's or CD2's... did not believe people would walk away.
Well, it's really very basic. The people who invented the investments, the people trading them, the people originating the loans, the people runnign the companies..they all have one thing in common. They aren't "one of us." They aren't the people who are "nickeled and dimed." They don't know who we are, they don't know how we feel or how we think. They are so vastly removed from us, that while they think they can engineer a scam that we will all fall for, and we'll break all our bones trying to keep our houses (which are overpriced and over financed...based on the lie we were sold about the "American Dream")...they did not base their calculations on intimate knowledge. They based on on what they would do, and they aren't us. They have been removed from the common class, just as our politicians have (they don't have a clue. They wouldn't know what we think to save their lives; they couldn't even guess.)
We live in a Feudal society that refuses to ackowledge their feudalism, the knights and the nobles claim they are peasants, and tell the peasants they can buy their way to nobility (though they can't.) And the peasants, for the most part, sadly, bought it, along with their McMansions.
Wow, what a mess we have. The worse part, nobody seems to be able to see it. Well, after selling my late mother's house in 2005 for about 25 times what it should have sold for, and seeing who qualified for the mortgage, I sold every bank stock I had post haste. So I was a few years early. But at least my Citigroup shares sold for what everyone wanted us to believe they were worth.
What a tangled web. Why don't you guys report the story behind the story...how the industry got twisted in the 90s? The relevant legislation that was supposed to protect these behemoths from the disaster they were creating (in the name of their own greed).
I'd love to hear that story on the airwaves. but I won't hold my breath.
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