Protecting the Toledo Housing Market
You don’t hear a lot about smaller, Midwestern cities in a news climate filled with stories of home mortgage layoffs and problems in the California and Florida real estate markets.
But Toledo, Ohio, needs to do all it can to improve the local housing market, according to an editorial in today’s Toledo Blade.
That’s why an ordinance proposed by City Councilman Joe McNamara to protect families from falling victim to sub-standard housing purchased in land-contract deals deserves support.
This is really a no-brainer, especially as the bad credit home loan lending disaster continues to drag down the housing market, both in Toledo and in the nation as a whole.
In the home mortgage loan market, some lenders gambled by offering highly attractive, adjustable-rate mortgages to high-risk, or subprime, buyers.
Then, when mortgage rates rose, too many of these buyers couldn’t afford the higher monthly cost and defaulted.
Similarly, low-cost homes purchased on land contracts have been a problem in Toledo, most notably when the former Westhaven Group foisted off run-down properties on high-risk Ohio mortgage applicants.
When a buyer could no longer meet the contract, the housing was “flipped,” or resold, to another unsuspecting family.
Westhaven, at one time the largest residential property owner in Lucas County, ultimately was shut down but the problem of aging housing stock persists, which is why the McNamara legislation is important.
The ordinance would duplicate a state requirement that land contracts be recorded publicly, giving the city additional enforcement leverage.
Every house sold on a land contract would have to be inspected and where necessary sellers would be required to bring the property up to code.
Predictably, the housing industry opposes the measure, which would make a violation a misdemeanor, claiming it would be better to educate buyers on the drawbacks of land contracts than adopt new regulations.
All buyers in the Ohio housing market need thorough knowledge of the pitfalls of real estate deals, but more protection is necessary.
Moreover, you would think that the legitimate real estate market would want to ferret out unscrupulous land-contract sellers.
This legislation would do that. And is the least the public should expect.
SOURCE: Toledo Blade