Louisville KY Real Estate: What Happens in Cleveland Stays in Cleveland? Only if They Can't Get Loot From Lenders

Ahhh yes...who doesn't remember with fondness the first time they saw the motion picture classic Godzilla -vs- King Kong?



Well, in case you didn't see it the first time, you can see it played out in real life up in Cleveland, Ohio. As kind of reported by MSNBC, in one corner is a whole slew of evil lenders backed by the power of L.O.O.T. In the other corner is the power of the local government. The Cleveland folks are honked-off because the city is getting stuck with costs of boarding up, demolishing, etc. houses that have been foreclosed on, etc. (at least until they can find some unsuspecting investor/buyer to pin it on...but even that strategy can't work so well anymore since there are fewer investors). They also don't cotton to the declining property values that are the result of too many houses for sale and not enough buyers. That is bad for property tax revenue. They are suing based on a public nuisance law, you know the one that says if a home owner moves out of a house and it causes problems, the people who lent the purchase money should pay (?!?!?).



But never fear! Old Milton Friedman was right: when government gets too much power, corporate interests focus on getting involved with it. One-stop-shopping, don't you know. Again, humongo multi-national lenders will not be deterred by the minimal power the city government can wield. They will have their lawyers quash this attempt. If it starts getting a little too popular, they will exert influence at the federal level, rather than playing "whack-a-mole" with every small-medium-large city government in the nation.



So, in the final analysis Godzilla -vs- Kitty might be the better movie comparison:

PS: Mayor Jackson of Cleveland was quoted as saying "We have to hold accountable those who are responsible" (as he presented his reasons for suing lenders).

Does this include people who signed promises to pay loans back but didn't? How about the big institutional investors who wanted to buy C and D paper to theoretically pump up the return on Grandpa's retirement account? Does this include the Federal Government who encouraged lenders to make home ownership available to people who weren't likely to repay the loans? Does this include real estate/mortgage salespeople/brokers who helped people believe they could get into these homes they really couldn't afford? Or is accountability just for those mega-lenders with really deep pockets who offered the crummy loans whom we think we have at least some chance of getting loot from? Just wondering.