A group of Ohio cities have come together to form the “Ohio Plan” and have formally requested $200 million from JPMorgan Chase, which was part of the recent foreclosure fraud settlement announced by the Justice Department in November. Their plan is to use the money for foreclosure prevention, demolition and housing preservation.
This “Ohio Plan” is part of an on-going project in Cleveland, Dayton, Lorain and Cincinnati Port Development Authority. The effort within these cities is focused on removing thousands of vacant/abandoned homes which have hurt neighborhoods throughout these communities. The blighted homes remain a health and safety hazard which has become a haven for criminals to prey upon and decrease the home values in the neighborhoods. While not a panacea, these monies would go a long way to begin to rebuild these cities that were devastated by the financial crisis and mortgage meltdown that unfairly targeted urban communities throughout the Midwest.
JPMorgan and two subsidiaries, Washington Mutual and Bear Stearns, were accused of duping various investors by selling risky securities. Federal authorities charged that these residential mortgages bundled as securities were “toxic” and the risks of these improper mortgages were not disclosed to subsequent investors.
The JPMorgan settlement was for $13 billion of which $9 billion was earmarked for specific uses and recipients. The Ohio Plan calls for $144 million for demolishing vacant/abandoned structures, $16 million for foreclosure prevention programs, $35 million for renovation/rehab of homes to be saved and $5 million for vacant land remediation.
The cost of demolition of these vacant houses is staggering. Ohio Attorney General Dewine has already set up a fund of $75 million to assist local communities with the cost of razing these abandoned structures. But the costs throughout the State far exceed what has been set aside by the Attorney General. Pushing for and acquiring these settlement funds from JPMorgan Chase and others would greatly assist local communities in dealing with this communitywide hardship that will take years to recover from. The health of our cities, the financial security and safety of our communities depend on the banks paying back for the crisis and moving forward to restore our neighborhoods.
Frank Ford, Senior Policy Advisor for the Thriving Communities Institute, has gone on record stating that Ohio has been hit harder and for much longer than most other states. “We don’t have to spend any significant time ramping up our capacity to do this,” Ford said.
The Ohio Plan partners have asked Governor Kasich and US Attorney Steve Dettlebach for intervention. Specifically, Gov. Kasich has been requested to forward the plan to Jamie Dimon, CEO of JPMorgan Chase, and US Attorney Dettlebach to forward to Justice Department officials.