Bloomberg News reports that Bank of America (B of A), the nation’s largest mortgage servicer, has a solution for disposing of the worst abandoned and foreclosed homes. B of A will work with a local agency in Cleveland to demolish 100 homes. Gus Frangos, president of the Cleveland-based Cuyahoga County Land Reutilization Corp., says, “The best thing we can do to stabilize the market is to get the garbage off.” RealtyTrac, Inc., says as of June, one in every 77 homes was in some state of foreclosure, and these properties have contributed to the continuing falling of home prices that turns prospective buyers away. B of A spokesman Rick Simon says the company has plans to bulldoze 100 properties in Detroit and 150 in Chicago, and may extend the plan to nine cities by year’s end. With 40,000 foreclosures in the first quarter, taxes and maintenance costs continue to draw on bank resources on homes that are worth below $10,000, and would cost much more to rehab. Christopher Thornburg, of Beacon Economics, LLC, noting no one wants these houses, says, “Bank of America is not going to be able to cover its losses, so it might as well give them away and get a little write-off and some nice public relations.”
