A microcosm of the subprime meltdown
TEXT OF STORY
Lisa Napoli: The sour mood on Wall Street has to do with one company’s dour forecasts in its Q2 filings Tuesday: The nation’s largest mortgage lender, Countrywide, said real estate prices are falling “almost like never before.”
Few places in the U.S. have been hit harder by the subprime mortgage meltdown than Cleveland, Ohio. Later today, the Senate’s Joint Economic Committee will delve deep into that city’s mortgage woes. From Washington, Steve Henn reports.
Steve Henn: In Slavic Village — a working-class neighborhood in Cleveland — there were almost 400 foreclosures last year. Entire blocks have been blighted.
Jim Rokokis is the local county treasurer. He’ll be testifying today and is glad to finally have Congress’ ear.
Jim Rokokis: It’s only now that there is blood flowing on the streets of Wall Street that people are paying attention to this problem.
This year alone, Rokokis expects 17,000 foreclosures in his county. He blames careless, even abusive mortgage lending.
According to Cayahoga county statistics, just one lender, Argent Mortgage, has seen about 25 percent of its loans in Cleveland go under. Rokokis estimates Argent’s Cleveland-area portfolio is almost one-quarter of a billion dollars in the red.
Argent officials wouldn’t comment on tape, but insist their foreclosure rates are better than average in Cleveland. In 2006, Argent’s sister company, Ameriquest, settled a massive abusive lending case for $325 million.
In Washington, I’m Steve Henn for Marketplace.
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