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Newspaper: Cleveland aided foreclosure crisis
The city of Cleveland contributed to its foreclosure crisis by helping low-income people buy homes with mortgage payments they couldn't afford, a newspaper investigation published Sunday found.

The city provided loans of up to $20,000 through the federally funded Afford-A-Home program but did not check whether recipients could afford to stay in the homes, The (Cleveland) Plain Dealer reported Sunday. Cleveland, which has one of the nation's worst foreclosure problems, did not change its policies even as hundreds of people defaulted on their mortgages....

...An analysis of property and loan records from 2000 to 2007 found that many of the hundreds of loan recipients, mainly low-income people, defaulted on their mortgages within two years of receiving the loans. Over eight years, nearly half of the 584 homes sold by the three largest for-profit companies who participated in the program have entered foreclosure -- and more than one-third of those have been sold at a sheriff's sale or are abandoned.

They largely became a lost investment for the city, and represented a loss of tax dollars of $2.3 million, the review found...