GAO: While rare, banks now walking away from houses

Columbus Business First

The “walk away” is a hallmark of the housing mess, a term frequently used to describe a borrower walking away from an unaffordable – or perhaps unwanted – house.

In in rare cases, however, but more frequently in economically hard-hit cities such as Cleveland and Youngstown, banks are also walking away from properties after throwing out the residents but before completing foreclosures, a Monday report from the Government Accountability Office concluded.

The practice has drawn the ire of U.S. Sen. Sherrod Brown, D-Ohio, who called for the GAO examination after reading an October 2009 article in the Cleveland Plain Dealer highlighting the practice.

“When banks abandon foreclosed properties, everybody pays the price,” Brown said in a media release on the report. “When banks abandon foreclosed properties, they needlessly evict Ohioans from their homes while footing taxpayers with the bill when these vacant properties require clean-up or monitoring.”

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GAO: While rare, banks now walking away from houses »