e Obama Administration’s E orts to Stabilize  e Housing Market and Help American Homeowners | September 2011 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Cleveland MSA | Page 1

Spotlight on the Housing Market 

in Cleveland-Elyria-Mentor, Ohio

The Cleveland-Elyria-Mentor, Ohio Metropolitan Statistical Area (Cleveland MSA) includes Cuyahoga, Geauga, Lake, Lorain and Medina Counties in northeastern 

Ohio. The foreclosure crisis in Cleveland and other parts of the industrial Midwest developed much earlier than in other areas of the nation. As early as 2003, 

the share of distressed mortgages in Cleveland was above the national average and rising –the rise in distressed mortgage shares did not begin until 2007 in most 

other regions. The Cleveland MSA did not see the rapid appreciation of the housing bubble; yet, local home prices fell by nearly as great a percentage as those 

for the rest of the nation. By the start of the national mortgage crisis in 2007, Cleveland had already experienced several years of above average unemployment 

and population declines, and high cost or subprime loans were defaulting at eight times the rate of other mortgages. For all of these reasons, the housing market 

in Cleveland remains fragile – with low property values, deeply-discounted foreclosed properties affecting neighborhood values, and many severely underwater 

mortgages. However, the Administration’s broad approach to stabilizing the housing market has been a source of real help to homeowners in Cleveland and 

surrounding cities. This addendum to the Administration’s housing scorecard provides a summary of trends and conditions in the local economy and the impact of 

the Administration’s efforts to stabilize the housing market and help local homeowners. 

Population Growth, Employment, 

and Housing Market: 

The population of the Cleveland MSA has fallen at an annual 

rate of 0.3 percent since 2000. The most recent decennial 

Census count, at less than 2.1 million as of April 2010, 

represents a decline of 70,900 persons since the previous 

Census. During this time, an average of 11,500 people 

moved out of the area each year, which was driven by an 

average loss of 14,500 jobs each year. Population loss 

peaked in the year ending July 2006 but has slowed by more 

than half that level since. 

Area employment fell in 8 of the past 10 years primarily due to 

job losses in the manufacturing sector, which accounted for more 

than 40 percent of all job losses. Slightly more than one million 

people were employed in the MSA as of July 2011 – up by 0.7 

percent from a year ago – while the nation saw a 0.9 percent 

job growth rate during the same period. Local payrolls remain 

137,600 jobs below the record high of 1,138,200 jobs recorded 

in May 2000. The average unemployment rate was 7.9 percent 

as of July 2011, down considerably from 9.3 percent a year 

earlier. The decline in the unemployment rate is mainly attributed 

to a net increase in employment of 13,090. Employment gains 

occurred in education and health services (6,800), professional 

and business services (3,900), and the wholesale and retail trade 

sector (3,500), while offset by a decline in government services 

(3,500). Even the manufacturing sector showed an increase of 

1,700 jobs in the year ending July 2011. The national average 

unemployment rate during the same period was 9.1 percent, 

down from 9.5 percent in July 2010. 

Populati on Has Declined in Cleveland Over the Past Decade

Date

Cleveland MSA 

Populati on

Annual Growth Rate 

From Prior Date

4/1/2000 2,148,143 

4/1/2010 2,077,240 -0.3%

Source: Census Bureau (2000 and 2010 Decennial)

Spotlight on the Housing Market in Cleveland-Elyria-Mentor, Ohio

Date Clevelan

4/1/00 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

4/1/10 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  

Source: Census Bureau (2000 and 2010 

Population	
  Has	
  Decline	
  

The Obama Administration's Efforts to Stabilize the Housing Market and Help American Homeowners 

The	
  Cleveland-­‐Elyria-­‐Mentor,	
  Ohio	
  Metropolitan	
  StaAsAcal	
  Area	
  (Cleveland	
  MSA)	
  comprises	
  Cuyahoga,	
  Geauga,	
  Lake,	
  Lorain	
  and	
  Medina

industrial	
  Midwest,	
  the	
  foreclosure	
  crisis	
  in	
  Cleveland	
  developed	
  differently	
  and	
  earlier	
  than	
  in	
  other	
  areas	
  of	
  the	
  naAon.	
  	
  As	
  early	
  as	
  200

that	
  of	
  the	
  naAon	
  and	
  rising	
  -­‐-­‐	
  the	
  rapid	
  rise	
  of	
  distressed	
  mortgages	
  in	
  the	
  naAon	
  did	
  not	
  begin	
  unAl	
  2007.	
  	
  A	
  substanAal	
  share	
  of	
  mortg

or	
  subprime	
  loans	
  which	
  typically	
  defaulted	
  at	
  8	
  Ames	
  the	
  rate	
  of	
  other	
  mortgages.	
  	
  By	
  2007,	
  Cleveland	
  had	
  already	
  experienced	
  several	
  

populaAon	
  declines.	
  Cleveland	
  did	
  not	
  experience	
  the	
  rapid	
  appreciaAon	
  of	
  the	
  housing	
  bubble;	
  yet,	
  home	
  prices	
  have	
  fallen	
  on	
  a	
  percen

market	
  in	
  Cleveland	
  remains	
  fragile	
  –	
  with	
  low	
  property	
  values,	
  foreclosed	
  properAes	
  sold	
  at	
  deep	
  discounts	
  adversely	
  affecAng	
  neighbo

the	
  AdministraAon’s	
  broad	
  approach	
  to	
  stabilizing	
  the	
  housing	
  market	
  has	
  been	
  the	
  source	
  of	
  real	
  help	
  to	
  homeowners	
  in	
  Cleveland	
  and

AdministraAon’s	
  housing	
  scorecard	
  provides	
  a	
  summary	
  of	
  trends	
  and	
  condiAons	
  in	
  the	
  local	
  economy	
  and	
  the	
  impact	
  of	
  the	
  AdministraA

homeowners.	
  	
  

	
  	
  

Population Growth, Employment, and Housing Market: 

The	
  Cleveland	
  MSA	
  has	
  experienced	
  populaAon	
  decline	
  since	
  2000,	
  decreasing	
  at	
  an	
  annual	
  rate	
  of	
  0.3	
  

percent	
  over	
  the	
  decade.	
  	
  The	
  most	
  recent	
  decennial	
  Census	
  count,	
  at	
  less	
  than	
  2.1	
  million	
  as	
  of	
  April	
  2010,	
  

represents	
  a	
  decline	
  of	
  70,900	
  persons	
  since	
  the	
  previous	
  Census.	
  	
  During	
  this	
  Ame,	
  net	
  out-­‐migraAon	
  

averaged	
  11,500	
  people	
  a	
  year,	
  mostly	
  due	
  to	
  an	
  average	
  annual	
  loss	
  of	
  14,500	
  jobs.	
  	
  Out-­‐migraAon	
  peaked	
  

in	
  the	
  year	
  ending	
  July	
  2006	
  and	
  has	
  fallen	
  by	
  more	
  than	
  half	
  that	
  level	
  since.	
  	
  As	
  a	
  result,	
  the	
  annual	
  

decline	
  in	
  populaAon	
  has	
  slowed	
  considerably	
  since	
  2006.

Area	
  employment	
  fell	
  in	
  8	
  of	
  the	
  past	
  10	
  years	
  primarily	
  due	
  to	
  losses	
  in	
  the	
  manufacturing	
  sector,	
  which	
  accounted	
  for	
  more	
  than	
  40	
  percent	
  of

employed	
  in	
  the	
  MSA	
  as	
  of	
  July	
  2011	
  –	
  up	
  by	
  0.7	
  percent	
  from	
  a	
  year	
  ago–	
  while	
  the	
  naAon	
  saw	
  a	
  0.9	
  percent	
  job	
  growth	
  rate	
  during	
  the	
  same	
  p

high	
  of	
  1,138,200	
  jobs	
  recorded	
  in	
  May	
  2000.	
  The	
  average	
  unemployment	
  rate	
  was	
  7.9	
  percent	
  as	
  of	
  July	
  2011,	
  down	
  considerably	
  from	
  9.3	
  perc

mainly	
  a^ributed	
  to	
  a	
  net	
  increase	
  in	
  employment	
  of	
  13,090.	
  	
  Employment	
  gains	
  occurred	
  in	
  educaAon	
  and	
  health	
  services	
  (6,800),	
  professional	
  

trade	
  sector	
  (3,500),	
  while	
  offset	
  by	
  a	
  decline	
  in	
  government	
  services	
  (3,500).	
  	
  Even	
  the	
  manufacturing	
  sector	
  showed	
  an	
  increase	
  of	
  1,700	
  jobs	
  i

unemployment	
  rate	
  during	
  the	
  same	
  period	
  was	
  9.1	
  percent,	
  down	
  from	
  9.5	
  percent	
  a	
  year	
  ago.	
  	
  	
  

120	
  

125	
  

130	
  

135	
  

140	
  

145	
  

150	
  

950	
  

1,000	
  

1,050	
  

1,100	
  

1,150	
  

Thousands	
  

Year	
  and	
  Quarter	
  

Job Market Conditions are Stabilizing 

Quarterly	
  Nonfarm	
  Employment	
  

Cleveland	
  	
  MSA	
   NaAon	
  (right	
  	
  axis)	
   Seasonally	
  Adjusted	
  Data	
  	
  

Source:	
  Bureau	
  of	
  Labor	
  	
  StaAsAcs	
  

Millions	
  

0	
  

2	
  

4	
  

6	
  

8	
  

10	
  

12	
  

Sea

Sou

light on the Housing Market in Cleveland-Elyria-Mentor, Ohio

Date Cleveland	
  MSA	
  Population

Annual	
  Growth	
  Rate	
  From	
  

Prior	
  Date

4/1/00 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  2,148,143 -­‐

4/1/10 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  2,077,240 -­‐0.3%

Source: Census Bureau (2000 and 2010 Decennial)

Population	
  Has	
  Decline	
  in	
  Cleveland	
  Over	
  the	
  Past	
  Decade

The Obama Administration's Efforts to Stabilize the Housing Market and Help American Homeowners - September 2011 

d-­‐Elyria-­‐Mentor,	
  Ohio	
  Metropolitan	
  StaAsAcal	
  Area	
  (Cleveland	
  MSA)	
  comprises	
  Cuyahoga,	
  Geauga,	
  Lake,	
  Lorain	
  and	
  Medina	
  CounAes	
  in	
  northeastern	
  Ohio.	
  	
  As	
  with	
  other	
  parts	
  of	
  the	
  

dwest,	
  the	
  foreclosure	
  crisis	
  in	
  Cleveland	
  developed	
  differently	
  and	
  earlier	
  than	
  in	
  other	
  areas	
  of	
  the	
  naAon.	
  	
  As	
  early	
  as	
  2003,	
  the	
  share	
  of	
  distressed	
  mortgages	
  in	
  Cleveland	
  was	
  above	
  

aAon	
  and	
  rising	
  -­‐-­‐	
  the	
  rapid	
  rise	
  of	
  distressed	
  mortgages	
  in	
  the	
  naAon	
  did	
  not	
  begin	
  unAl	
  2007.	
  	
  A	
  substanAal	
  share	
  of	
  mortgage	
  loans	
  in	
  the	
  Cleveland	
  area	
  prior	
  to	
  2007	
  were	
  high	
  cost	
  

	
  loans	
  which	
  typically	
  defaulted	
  at	
  8	
  Ames	
  the	
  rate	
  of	
  other	
  mortgages.	
  	
  By	
  2007,	
  Cleveland	
  had	
  already	
  experienced	
  several	
  years	
  of	
  unemployment	
  above	
  the	
  naAonal	
  average	
  and	
  

eclines.	
  Cleveland	
  did	
  not	
  experience	
  the	
  rapid	
  appreciaAon	
  of	
  the	
  housing	
  bubble;	
  yet,	
  home	
  prices	
  have	
  fallen	
  on	
  a	
  percentage	
  basis	
  nearly	
  as	
  far	
  as	
  those	
  for	
  the	
  naAon.	
  	
  The	
  housing	
  

eveland	
  remains	
  fragile	
  –	
  with	
  low	
  property	
  values,	
  foreclosed	
  properAes	
  sold	
  at	
  deep	
  discounts	
  adversely	
  affecAng	
  neighborhoods,	
  and	
  many	
  severely	
  underwater	
  mortgages.	
  	
  However,	
  

traAon’s	
  broad	
  approach	
  to	
  stabilizing	
  the	
  housing	
  market	
  has	
  been	
  the	
  source	
  of	
  real	
  help	
  to	
  homeowners	
  in	
  Cleveland	
  and	
  surrounding	
  ciAes.	
  	
  This	
  bimonthly	
  addendum	
  to	
  the	
  

on’s	
  housing	
  scorecard	
  provides	
  a	
  summary	
  of	
  trends	
  and	
  condiAons	
  in	
  the	
  local	
  economy	
  and	
  the	
  impact	
  of	
  the	
  AdministraAon’s	
  efforts	
  to	
  stabilize	
  the	
  housing	
  market	
  and	
  help	
  local	
  

s.	
  	
  

h, Employment, and Housing Market: 

has	
  experienced	
  populaAon	
  decline	
  since	
  2000,	
  decreasing	
  at	
  an	
  annual	
  rate	
  of	
  0.3	
  

cade.	
  	
  The	
  most	
  recent	
  decennial	
  Census	
  count,	
  at	
  less	
  than	
  2.1	
  million	
  as	
  of	
  April	
  2010,	
  

	
  of	
  70,900	
  persons	
  since	
  the	
  previous	
  Census.	
  	
  During	
  this	
  Ame,	
  net	
  out-­‐migraAon	
  

ople	
  a	
  year,	
  mostly	
  due	
  to	
  an	
  average	
  annual	
  loss	
  of	
  14,500	
  jobs.	
  	
  Out-­‐migraAon	
  peaked	
  

ly	
  2006	
  and	
  has	
  fallen	
  by	
  more	
  than	
  half	
  that	
  level	
  since.	
  	
  As	
  a	
  result,	
  the	
  annual	
  

n	
  has	
  slowed	
  considerably	
  since	
  2006.

ll	
  in	
  8	
  of	
  the	
  past	
  10	
  years	
  primarily	
  due	
  to	
  losses	
  in	
  the	
  manufacturing	
  sector,	
  which	
  accounted	
  for	
  more	
  than	
  40	
  percent	
  of	
  all	
  job	
  losses.	
  	
  Slightly	
  more	
  than	
  one	
  million	
  people	
  were	
  

A	
  as	
  of	
  July	
  2011	
  –	
  up	
  by	
  0.7	
  percent	
  from	
  a	
  year	
  ago–	
  while	
  the	
  naAon	
  saw	
  a	
  0.9	
  percent	
  job	
  growth	
  rate	
  during	
  the	
  same	
  period.	
  	
  Local	
  payrolls	
  remain	
  137,600	
  jobs	
  below	
  the	
  record	
  

bs	
  recorded	
  in	
  May	
  2000.	
  The	
  average	
  unemployment	
  rate	
  was	
  7.9	
  percent	
  as	
  of	
  July	
  2011,	
  down	
  considerably	
  from	
  9.3	
  percent	
  a	
  year	
  earlier.	
  	
  The	
  decline	
  in	
  the	
  unemployment	
  rate	
  is	
  

a	
  net	
  increase	
  in	
  employment	
  of	
  13,090.	
  	
  Employment	
  gains	
  occurred	
  in	
  educaAon	
  and	
  health	
  services	
  (6,800),	
  professional	
  and	
  business	
  services	
  (3,900),	
  and	
  the	
  wholesale	
  and	
  retail	
  

	
  while	
  offset	
  by	
  a	
  decline	
  in	
  government	
  services	
  (3,500).	
  	
  Even	
  the	
  manufacturing	
  sector	
  showed	
  an	
  increase	
  of	
  1,700	
  jobs	
  in	
  the	
  year	
  ending	
  July	
  2011.	
  The	
  naAonal	
  average	
  

during	
  the	
  same	
  period	
  was	
  9.1	
  percent,	
  down	
  from	
  9.5	
  percent	
  a	
  year	
  ago.	
  	
  	
  

120	
  

125	
  

130	
  

135	
  

140	
  

145	
  

150	
  

Year	
  and	
  Quarter	
  

Job Market Conditions are Stabilizing 

Quarterly	
  Nonfarm	
  Employment	
  

Cleveland	
  	
  MSA	
   NaAon	
  (right	
  	
  axis)	
   

usted	
  Data	
  	
  

	
  of	
  Labor	
  	
  StaAsAcs	
  

Millions	
  

0	
  

2	
  

4	
  

6	
  

8	
  

10	
  

12	
  

Unemployment Rate Remains High, 

But Shows Improvement 

Monthly	
  Unemployment	
  Rate	
  (Percent)	
  

Cleveland	
  MSA	
   NaAon	
   Seasonally	
  Adjusted	
  Data	
  

Source:	
  Bureau	
  of	
  Labor	
  StaAsAcs	
  
 e Obama Administration’s E orts to Stabilize  e Housing Market and Help American Homeowners | September 2011 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Cleveland MSA | Page 2

Home sales remain soft in the Cleveland MSA. Existing home 

sales have declined steadily since 2005 and new home sales 

have been declining since 2004, although the market saw a 

slight increase between 2009 and 2010. During the fi rst six 

months of 2011, existing home sales declined by 20 percent 

compared with the fi rst six months of 2010, while new home 

sales declined 42 percent, according to CoreLogic. Sales of 

distressed homes – foreclosures and short sales – currently 

represent 27 percent of all existing home sales in the Cleveland 

market, on par with the national rate. The high proportion of 

distressed sales – which were sold at deep discounts according 

to Case Western University researchers – has weakened 

Cleveland home prices overall. The CoreLogic repeat-sales 

house price index shows that home prices in Cleveland rose at 

one-fi fth the national pace between 2000 and 2005. Although 

home prices in Cleveland never experienced the bubble that 

was seen in the rest of the nation, prices nonetheless declined 28 

percent from their peak in October 2005 to their low in February 

2009 – similar to the national average peak-to-low decline of 

29 percent. While the Cleveland market remains fragile, local 

home prices have shown signs of stabilizing since February 

2009 and are currently above the lows seen in 2009. The local 

rental market is also showing signs of improvement with an 

average apartment vacancy rate of 5.1 percent in the second 

quarter of 2011, down from 6.7 percent a year earlier and 

below the national average of 5.9 percent according to Reis Inc. 

The average rent for an apartment, at $739, is only 1 percent 

higher than a year ago. The average rent nationwide increased 

by 2 percent to $1,053 during the same period.

Trends in Mortgage 

Delinquencies and Foreclosures: 

Homeowners in Cleveland are still struggling with high levels 

of mortgage delinquency and foreclosure. As of July 2011, 

LPS Applied Analytics ranked the Cleveland MSA 42nd out 

of 367 metropolitan areas for the percentage of mortgages 

that were 90 or more days delinquent or in the process 

of foreclosure. Through the efforts of numerous state and 

local entities in partnership with the federal government, 

the number of mortgages at risk of foreclosure (90 or more 

days delinquent or in the process of foreclosure) in the 

Cleveland area declined from 19,471 (9.6 percent of all 

mortgages) in July 2010 to 18,975 (8.7 percent) in July 

2011, compared with a national decline from 7.5 to 6.8 

percent. CoreLogic data since 2000 show that the share 

of distressed mortgages (90 or more days delinquent) has 

been consistently higher in Cleveland than in the nation. 

Since peaking in February 2010 at 8.7 percent, 90-plus-day 

delinquency rates have fallen to 7.8 percent. This compares 

with a national decline from 8.5 percent to 7.2 percent 

over the same period. Realty Trac data show that completed 

foreclosures have also declined in Cleveland over the past 

year, dropping from 1,840 in the second quarter of 2010 

to 690 in the second quarter of 2011, although lender 

process reviews continue to affect foreclosure completions 

locally and nationally. CoreLogic reports that 27 percent of 

mortgages in the Cleveland MSA are currently in negative 

equity compared with 23 percent nationally– representing 

even more homeowners and loans potentially at risk. 

Spotlight on the Housing Market in Cleveland-Elyria-Mentor, Ohio

g	
  home	
  sales	
  have	
  declined	
  steadily	
  since	
  

09	
  and	
  2010	
  aPer	
  declining	
  since	
  2004.	
  	
  	
  

y	
  20 percent	
  compared	
  with	
  the	
  first	
  six	
  

ding	
  to	
  CoreLogic.	
  Sales	
  of	
  distressed	
  homes	
  –	
  

	
  exisSng	
  home	
  sales	
  in	
  the	
  MSA,	
  the	
  same	
  as	
  

	
  which	
  have	
  been	
  sold	
  at	
  deep	
  discounts	
  

kept	
  Cleveland	
  home	
  prices	
  depressed.	
  The	
  

n	
  Cleveland	
  rose	
  at	
  one-­‐fiPh	
  the	
  pace	
  of	
  the	
  

n	
  Cleveland	
  never	
  experienced	
  the	
  bubble	
  

ent	
  from	
  their	
  peak	
  in	
  October	
  2005	
  to	
  their	
  

w	
  decline	
  of	
  29	
  percent.	
  	
  While	
  the	
  overall	
  

bilizing	
  since	
  February	
  2009	
  and	
  are	
  currently	
  

with	
  an	
  average	
  apartment	
  vacancy	
  rate	
  of	
  5.1	
  

ear	
  earlier	
  and	
  below	
  the	
  naSonal	
  average	
  of	
  

ent,	
  at	
  $739,	
  is	
  just	
  1	
  percent	
  higher	
  than	
  a	
  

1,053	
  during	
  the	
  same	
  period.	
  	
  	
  	
  

res:	
  	
  	
   

age	
  delinquency	
  and	
  foreclosure.	
  	
  As	
  of	
  July	
  

	
  percentage	
  of	
  mortgages	
  that	
  were	
  90	
  or	
  more	
  

Applied	
  AnalyScs.	
  	
  Through	
  the	
  efforts	
  of	
  

overnment,	
  the	
  number	
  of	
  mortgages	
  at	
  risk	
  of	
  

osure)	
  in	
  the	
  Cleveland	
  area	
  declined	
  

.7	
  percent)	
  in	
  July	
  2011,	
  compared	
  with	
  a	
  

at	
  the	
  share	
  of	
  distressed	
  mortgages	
  (90	
  or	
  

e	
  length	
  of	
  Sme.	
  Since	
  peaking	
  in	
  	
  February	
  

.8	
  percent.	
  This	
  compares	
  with	
  a	
  	
  naSonal	
  

ty	
  Trac	
  data	
  show	
  that	
  completed	
  foreclosures	
  

1,840	
  in	
  the	
  second	
  quarter	
  of	
  2010	
  to	
  690	
  in	
  the	
  

to	
  affect	
  foreclosure	
  compleSons	
  locally	
  and	
  

A	
  have	
  negaSve	
  equity	
  compared	
  with	
  23	
  

meowners	
  and	
  loans	
  potenSally	
  at	
  risk.	
  	
  

80	
  

100	
  

120	
  

140	
  

160	
  

180	
  

200	
  

220	
  

Cleveland House Prices Declined, 

Although Never Experienced Housing Bubble, 

Market Remains Fragile 

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

Cleveland	
  MSA	
   NaSon	
  

Source:	
  CoreLogic	
  

5.0	
  

5.5	
  

6.0	
  

6.5	
  

7.0	
  

7.5	
  

8.0	
  

8.5	
  

Year	
  and	
  Quarter	
  

Rental Vacancy Rates Consistently Lower an Nation 

Quarterly	
  Apartment	
  Rental	
  Vacancy	
  Rates	
  (Percent)	
  

Source:	
  Reis,	
  Inc.	
   Cleveland	
  MSA	
   NaSon	
  

0	
  

1,000	
  

2,000	
  

3,000	
  

4,000	
  

5,000	
  

6,000	
  

7,000	
  

8,000	
  

007	
   2008	
   2009	
   2010	
  

Home Sales: 

d to the Nation 

	
  (thousands)	
  	
  

NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Cleveland	
  MSA:	
  New	
  	
  Sales	
  

of	
  Realtors	
  

Share of Distressed Mortgages Rose Earlier an in the Nation 

 and Now Declining 

Mortgages	
  90+	
  Days	
  Delinquent	
  (Percent	
  of	
  all	
  Mortgages)	
  

Spotlight on the Housing Market in Cleveland-Elyria-Mentor, Ohio

t	
  remains	
  soP	
  in	
  the	
  Cleveland	
  MSA.	
  ExisSng	
  home	
  sales	
  have	
  declined	
  steadily	
  since	
  

	
  sales	
  showed	
  a	
  slight	
  increase	
  between	
  2009	
  and	
  2010	
  aPer	
  declining	
  since	
  2004.	
  	
  	
  

nths	
  of	
  2011,	
  exisSng	
  home	
  sales	
  declined	
  by	
  20 percent	
  compared	
  with	
  the	
  first	
  six	
  

	
  new	
  home	
  sales	
  declined	
  42	
  percent,	
  according	
  to	
  CoreLogic.	
  Sales	
  of	
  distressed	
  homes	
  –	
  

	
  sales	
  –	
  currently	
  represent	
  27	
  percent	
  of	
  all	
  exisSng	
  home	
  sales	
  in	
  the	
  MSA,	
  the	
  same	
  as	
  

high	
  proporSon	
  of	
  distressed	
  sales	
  (many	
  of	
  which	
  have	
  been	
  sold	
  at	
  deep	
  discounts	
  

rs	
  at	
  Case	
  Western	
  Reserve	
  University)	
  has	
  kept	
  Cleveland	
  home	
  prices	
  depressed.	
  The	
  

	
  house	
  price	
  index	
  shows	
  that	
  home	
  prices	
  in	
  Cleveland	
  rose	
  at	
  one-­‐fiPh	
  the	
  pace	
  of	
  the	
  

ween	
  2000	
  and	
  2005.	
  Although	
  home	
  prices	
  in	
  Cleveland	
  never	
  experienced	
  the	
  bubble	
  

Son	
  did,	
  prices	
  nonetheless	
  declined	
  28	
  percent	
  from	
  their	
  peak	
  in	
  October	
  2005	
  to	
  their	
  

-­‐	
  similar	
  to	
  the	
  naSonal	
  average	
  peak-­‐to-­‐low	
  decline	
  of	
  29	
  percent.	
  	
  While	
  the	
  overall	
  

,	
  local	
  home	
  prices	
  have	
  shown	
  signs	
  of	
  stabilizing	
  since	
  February	
  2009	
  and	
  are	
  currently	
  

	
  lows.	
  The	
  local	
  rental	
  market	
  is	
  improving	
  with	
  an	
  average	
  apartment	
  vacancy	
  rate	
  of	
  5.1	
  

quarter	
  of	
  2011,	
  down	
  from	
  6.7	
  percent	
  a	
  year	
  earlier	
  and	
  below	
  the	
  naSonal	
  average	
  of	
  

to	
  Reis,	
  Inc.	
  	
  The	
  average	
  rent	
  for	
  an	
  apartment,	
  at	
  $739,	
  is	
  just	
  1	
  percent	
  higher	
  than	
  a	
  

rent	
  naSonwide	
  increased	
  by	
  2	
  percent	
  to	
  $1,053	
  during	
  the	
  same	
  period.	
  	
  	
  	
  

age Delinquencies and Foreclosures:	
  	
  	
   

and	
  have	
  struggled	
  with	
  high	
  levels	
  of	
  mortgage	
  delinquency	
  and	
  foreclosure.	
  	
  As	
  of	
  July	
  

SA	
  ranked	
  42nd in	
  the	
  naSon	
  for	
  the	
  highest	
  percentage	
  of	
  mortgages	
  that	
  were	
  90	
  or	
  more	
  

he	
  process	
  of	
  foreclosure,	
  according	
  to	
  LPS	
  Applied	
  AnalyScs.	
  	
  Through	
  the	
  efforts	
  of	
  

cal	
  enSSes	
  in	
  partnership	
  with	
  the	
  federal	
  government,	
  the	
  number	
  of	
  mortgages	
  at	
  risk	
  of	
  

e	
  days	
  delinquent	
  or	
  in	
  the	
  process	
  of	
  foreclosure)	
  in	
  the	
  Cleveland	
  area	
  declined	
  

nt	
  of	
  all	
  mortgages)	
  in	
  July	
  2010	
  to	
  18,975	
  (8.7	
  percent)	
  in	
  July	
  2011,	
  compared	
  with	
  a	
  

m	
  7.5	
  to	
  6.8	
  percent.	
  CoreLogic	
  data	
  show	
  that	
  the	
  share	
  of	
  distressed	
  mortgages	
  (90	
  or	
  

has	
  been	
  high	
  in	
  Cleveland	
  for	
  a	
  considerable	
  length	
  of	
  Sme.	
  Since	
  peaking	
  in	
  	
  February	
  

-­‐plus-­‐day	
  delinquency	
  rates	
  have	
  fallen	
  to	
  7.8	
  percent.	
  This	
  compares	
  with	
  a	
  	
  naSonal	
  

nt	
  to	
  7.2	
  percent	
  over	
  the	
  same	
  period. Realty	
  Trac	
  data	
  show	
  that	
  completed	
  foreclosures	
  

eveland	
  over	
  the	
  past	
  year,	
  dropping	
  from 1,840	
  in	
  the	
  second	
  quarter	
  of	
  2010	
  to	
  690	
  in	
  the	
  

,	
  although	
  lender	
  process	
  reviews	
  conSnue	
  to	
  affect	
  foreclosure	
  compleSons	
  locally	
  and	
  

7	
  percent	
  of	
  mortgages	
  in	
  the	
  Cleveland	
  MSA	
  have	
  negaSve	
  equity	
  compared	
  with	
  23	
  

rding	
  to	
  CoreLogic	
  -­‐-­‐	
  represenSng	
  more	
  homeowners	
  and	
  loans	
  potenSally	
  at	
  risk.	
  	
  

80	
  

100	
  

120	
  

140	
  

160	
  

180	
  

200	
  

220	
  

Cleveland House Prices Declined, 

Although Never Experienced Housing Bubble, 

Market Remains Fragile 

Repeat-­‐Sales	
  House	
  Price	
  Index	
  	
  (Jan	
  2000	
  =	
  100)	
  

Cleveland	
  MSA	
   NaSon	
  

Source:	
  CoreLogic	
  

5.0	
  

5.5	
  

6.0	
  

6.5	
  

7.0	
  

7.5	
  

8.0	
  

8.5	
  

Year	
  and	
  Quarter	
  

Rental Vacancy Rates Consistently Lower an Nation 

Quarterly	
  Apartment	
  Rental	
  Vacancy	
  Rates	
  (Percent)	
  

Source:	
  Reis,	
  Inc.	
   Cleveland	
  MSA	
   NaSon	
  

0	
  

1,000	
  

2,000	
  

3,000	
  

4,000	
  

5,000	
  

6,000	
  

7,000	
  

8,000	
  

2004	
   2005	
   2006	
   2007	
   2008	
   2009	
   2010	
  

New and Existing Home Sales: 

Cleveland Compared to the Nation 

Annual	
  Home	
  Sales	
  (thousands)	
  	
  

Son:	
  ExisSng	
  Sales	
  (right	
  axis)	
   NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

veland	
  MSA:	
  ExisSng	
  	
  Sales	
   Cleveland	
  MSA:	
  New	
  	
  Sales	
  

	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

Share of Distressed Mortgages Rose Earlier an in the Nation 

 and Now Declining 

Mortgages90+DaysDelinquent(PercentofallMortgages)

Foreclosure	
  

Completions Foreclosure	
  Rate Foreclosure	
  

Completions Foreclosure	
  Rate

Cleveland	
  MSA	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  690	
   0.1% 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  16,200	
   1.7%

Nation	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  203,876	
   0.2% 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  2,203,386	
   1.7%

Note:	
  	
  Foreclosure	
  Rates	
  as	
  Percent	
  of	
  All	
  Housing	
  Units;

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  Data	
  through	
  July	
  2011	
  for	
  Foreclosures	
  since	
  2009

Source:	
  Realty	
  Trac	
  and	
  Census	
  Bureau

Foreclosure	
  Completion	
  Rates	
  in	
  the	
  Cleveland	
  MSA

Second	
  Quarter	
  2011 Since	
  April	
  1,	
  2009

Area

The	
  home	
  sales	
  market	
  remains	
  soP	
  in	
  the	
  Cleveland	
  MSA.	
  ExisSng	
  home	
  sales	
  have	
  declined	
  steadily	
  since	
  

2005,	
  while	
  new	
  home	
  sales	
  showed	
  a	
  slight	
  increase	
  between	
  2009	
  and	
  2010	
  aPer	
  declining	
  since	
  2004.	
  	
  	
  

During	
  the	
  first	
  six	
  months	
  of	
  2011,	
  exisSng	
  home	
  sales	
  declined	
  by	
  20 percent	
  compared	
  with	
  the	
  first	
  six	
  

months	
  of	
  2010,	
  while	
  new	
  home	
  sales	
  declined	
  42	
  percent,	
  according	
  to	
  CoreLogic.	
  Sales	
  of	
  distressed	
  homes	
  –	
  

foreclosures	
  and	
  short	
  sales	
  –	
  currently	
  represent	
  27	
  percent	
  of	
  all	
  exisSng	
  home	
  sales	
  in	
  the	
  MSA,	
  the	
  same	
  as	
  

the	
  naSonal	
  rate.	
  The	
  high	
  proporSon	
  of	
  distressed	
  sales	
  (many	
  of	
  which	
  have	
  been	
  sold	
  at	
  deep	
  discounts	
  

according	
  to	
  researchers	
  at	
  Case	
  Western	
  Reserve	
  University)	
  has	
  kept	
  Cleveland	
  home	
  prices	
  depressed.	
  The	
  

CoreLogic	
  repeat-­‐sales	
  house	
  price	
  index	
  shows	
  that	
  home	
  prices	
  in	
  Cleveland	
  rose	
  at	
  one-­‐fiPh	
  the	
  pace	
  of	
  the	
  

rest	
  of	
  the	
  naSon	
  between	
  2000	
  and	
  2005.	
  Although	
  home	
  prices	
  in	
  Cleveland	
  never	
  experienced	
  the	
  bubble	
  

that	
  the	
  rest	
  of	
  the	
  naSon	
  did,	
  prices	
  nonetheless	
  declined	
  28	
  percent	
  from	
  their	
  peak	
  in	
  October	
  2005	
  to	
  their	
  

low	
  in	
  February	
  2009	
  -­‐-­‐	
  similar	
  to	
  the	
  naSonal	
  average	
  peak-­‐to-­‐low	
  decline	
  of	
  29	
  percent.	
  	
  While	
  the	
  overall	
  

market	
  remains	
  fragile,	
  local	
  home	
  prices	
  have	
  shown	
  signs	
  of	
  stabilizing	
  since	
  February	
  2009	
  and	
  are	
  currently	
  

higher	
  than	
  their	
  2009	
  lows.	
  The	
  local	
  rental	
  market	
  is	
  improving	
  with	
  an	
  average	
  apartment	
  vacancy	
  rate	
  of	
  5.1	
  

percent	
  in	
  the	
  second	
  quarter	
  of	
  2011,	
  down	
  from	
  6.7	
  percent	
  a	
  year	
  earlier	
  and	
  below	
  the	
  naSonal	
  average	
  of	
  

5.9	
  percent	
  according	
  to	
  Reis,	
  Inc.	
  	
  The	
  average	
  rent	
  for	
  an	
  apartment,	
  at	
  $739,	
  is	
  just	
  1	
  percent	
  higher	
  than	
  a	
  

year	
  ago.	
  The	
  average	
  rent	
  naSonwide	
  increased	
  by	
  2	
  percent	
  to	
  $1,053	
  during	
  the	
  same	
  period.	
  	
  	
  	
  

Trends in Mortgage Delinquencies and Foreclosures:	
  	
  	
   Homeowners	
  in	
  Cleveland	
  have	
  struggled	
  with	
  high	
  levels	
  of	
  mortgage	
  delinquency	
  and	
  foreclosure.	
  	
  As	
  of	
  July	
  

2011,	
  the	
  Cleveland	
  MSA	
  ranked	
  42nd in	
  the	
  naSon	
  for	
  the	
  highest	
  percentage	
  of	
  mortgages	
  that	
  were	
  90	
  or	
  more	
  

days	
  delinquent	
  or	
  in	
  the	
  process	
  of	
  foreclosure,	
  according	
  to	
  LPS	
  Applied	
  AnalyScs.	
  	
  Through	
  the	
  efforts	
  of	
  

numerous	
  state	
  and	
  local	
  enSSes	
  in	
  partnership	
  with	
  the	
  federal	
  government,	
  the	
  number	
  of	
  mortgages	
  at	
  risk	
  of	
  

foreclosure	
  (90	
  or	
  more	
  days	
  delinquent	
  or	
  in	
  the	
  process	
  of	
  foreclosure)	
  in	
  the	
  Cleveland	
  area	
  declined	
  

from19,471	
  (9.6	
  percent	
  of	
  all	
  mortgages)	
  in	
  July	
  2010	
  to	
  18,975	
  (8.7	
  percent)	
  in	
  July	
  2011,	
  compared	
  with	
  a	
  

naSonal	
  of	
  decline	
  from	
  7.5	
  to	
  6.8	
  percent.	
  CoreLogic	
  data	
  show	
  that	
  the	
  share	
  of	
  distressed	
  mortgages	
  (90	
  or	
  

more	
  days	
  delinquent)	
  has	
  been	
  high	
  in	
  Cleveland	
  for	
  a	
  considerable	
  length	
  of	
  Sme.	
  Since	
  peaking	
  in	
  	
  February	
  

2010	
  at	
  8.7	
  percent,	
  90-­‐plus-­‐day	
  delinquency	
  rates	
  have	
  fallen	
  to	
  7.8	
  percent.	
  This	
  compares	
  with	
  a	
  	
  naSonal	
  

decline	
  from	
  8.5	
  percent	
  to	
  7.2	
  percent	
  over	
  the	
  same	
  period. Realty	
  Trac	
  data	
  show	
  that	
  completed	
  foreclosures	
  

have	
  also	
  declined	
  in	
  Cleveland	
  over	
  the	
  past	
  year,	
  dropping	
  from 1,840	
  in	
  the	
  second	
  quarter	
  of	
  2010	
  to	
  690	
  in	
  the	
  

second	
  quarter	
  of	
  2011,	
  although	
  lender	
  process	
  reviews	
  conSnue	
  to	
  affect	
  foreclosure	
  compleSons	
  locally	
  and	
  

naSonally. Currently,	
  27	
  percent	
  of	
  mortgages	
  in	
  the	
  Cleveland	
  MSA	
  have	
  negaSve	
  equity	
  compared	
  with	
  23	
  

percent	
  naSonally	
  according	
  to	
  CoreLogic	
  -­‐-­‐	
  represenSng	
  more	
  homeowners	
  and	
  loans	
  potenSally	
  at	
  risk.	
  	
  

5.0	
  

5.5	
  

6.0	
  

6.5	
  

7.0	
  

7.5	
  

8.0	
  

8.5	
  

Sou

0	
  

1,000	
  

2,000	
  

3,000	
  

4,000	
  

5,000	
  

6,000	
  

7,000	
  

8,000	
  

0	
  

5	
  

10	
  

15	
  

20	
  

25	
  

30	
  

35	
  

40	
  

45	
  

2003	
   2004	
   2005	
   2006	
   2007	
   2008	
   2009	
   2010	
  

New and Existing Home Sales: 

Cleveland Compared to the Nation 

Annual	
  Home	
  Sales	
  (thousands)	
  	
  

NaSon:	
  ExisSng	
  Sales	
  (right	
  axis)	
   NaSon:	
  New	
  Sales	
  (right	
  axis)	
  

Cleveland	
  MSA:	
  ExisSng	
  	
  Sales	
   Cleveland	
  MSA:	
  New	
  	
  Sales	
  

Sources:	
  CoreLogic,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

0	
  

1	
  

2	
  

3	
  

4	
  

5	
  

6	
  

7	
  

8	
  

9	
  

10	
  

Source:	
  CoreL
 e Obama Administration’s E orts to Stabilize  e Housing Market and Help American Homeowners | September 2011 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Cleveland MSA | Page 3

 e Administration’s E orts 

to Stabilize the Cleveland 

Housing Market: 

From the launch of the Administration’s assistance 

programs in April 2009 through the end of July 2011, 

approximately 32,300 mortgage assistance interventions 

have been offered to homeowners in the Cleveland 

metropolitan area. Nearly 17,700 interventions were 

offered through the Home Affordable Modifi cation 

Program (HAMP) and the Federal Housing Administration 

(FHA) loss mitigation and early delinquency intervention 

programs. An estimated additional 14,600 proprietary 

modifi cations have been offered through Hope Now 

Alliance servicers. While some homeowners may have 

received help from more than one program, the number 

of times assistance has been offered is nearly double 

the number of foreclosures completed during this period 

(16,200) in the Cleveland MSA. 

In addition to offers of mortgage aid to homeowners, the 

Administration’s Neighborhood Stabilization Program 

(NSP) and Hardest Hit Fund have been helping to 

stabilize the Cleveland housing market. 

Spotlight on the Housing Market in Cleveland-Elyria-Mentor, Ohio

1.636935

Projected Completed

4012 1682

1457 1122

32 14

2523 546

2225 4 

605 0 

1620 4 

900 0 

505 0 

56 

339 0 

NSP1	
  Total

Cleveland	
  MSA	
  NSP	
  Activity	
  (Housing	
  Units)

	
  	
  	
  Clearance	
  and	
  demolition

	
  	
  	
  Homeownership	
  assistance	
  to	
  low-­‐	
  and	
  moderate-­‐income

	
  	
  	
  Rehabilitation/reconstruction	
  of	
  residential	
  structures

NSP2	
  Total

	
  	
  	
  Rehabilitation/reconstruction	
  of	
  residential	
  structures

NSP3	
  Total

	
  	
  	
  Clearance	
  and	
  demolition

	
  	
  	
  Rehabilitation/reconstruction	
  of	
  residential	
  structures

	
  	
  	
  Clearance	
  and	
  demolition

	
  	
  	
  Homeownership	
  assistance	
  to	
  low-­‐	
  and	
  moderate-­‐income

The Administration’s Efforts to Stabilize the Cleveland Housing Market: 

From	
  the	
  launch	
  of	
  the	
  AdministraDon’s	
  assistance	
  programs	
  through	
  the	
  end	
  of	
  July	
  2011,	
  

approximately	
  32,300	
  mortgage	
  assistance	
  intervenDons	
  have	
  been	
  offered	
  to	
  homeowners	
  in	
  the	
  

Cleveland	
  metropolitan	
  area.	
  	
  Nearly	
  17,700	
  intervenDons	
  were	
  offered	
  through	
  the	
  Home	
  Affordable	
  

ModificaDon	
  Program	
  (HAMP)	
  and	
  the	
  Federal	
  Housing	
  AdministraDon	
  (FHA)	
  loss	
  miDgaDon	
  and	
  early	
  

delinquency	
  intervenDon	
  programs.	
  	
  An	
  esDmated	
  addiDonal	
  14,600	
  proprietary	
  modificaDons	
  have	
  

been	
  offered	
  through	
  Hope	
  Now	
  Alliance	
  servicers.	
  While	
  some	
  homeowners	
  may	
  have	
  received	
  help	
  

from	
  more	
  than	
  one	
  program,	
  the	
  number	
  of	
  Dmes	
  assistance	
  has	
  been	
  offered	
  is	
  nearly	
  double	
  the	
  

number	
  of	
  foreclosures	
  completed	
  during	
  this	
  period	
  (16,200)	
  in	
  the	
  Cleveland	
  MSA.	
  	
  	
  	
  

In	
  addiDon	
  to	
  offers	
  of	
  mortgage	
  aid	
  to	
  homeowners,	
  the	
  AdministraDon’s	
  Neighborhood	
  StabilizaDon	
  

Program	
  (NSP)	
  and	
  Hardest	
  Hit	
  Fund	
  (HHF)	
  have	
  been	
  helping	
  to	
  stabilize	
  the	
  Cleveland	
  housing	
  market.	
  	
  

Eight	
  jurisdicDons	
  in	
  the	
  Cleveland	
  MSA	
  have	
  received	
  NSP	
  grants:	
  the	
  ciDes	
  of	
  Cleveland,	
  East	
  

Cleveland,	
  Elyria,	
  Euclid,	
  and	
  Lorain	
  and	
  the	
  counDes	
  of	
  Cuyahoga,	
  Lake,	
  and	
  Lorain.	
  	
  The	
  Cuyahoga	
  

County	
  Land	
  ReuDlizaDon	
  CorporaDon, a	
  consorDum	
  between	
  the	
  City	
  of	
  Cleveland	
  and	
  Cuyahoga	
  

County,	
  has	
  also	
  received	
  an	
  NSP	
  grant.	
  

	
  	
  

0	
  

5	
  

10	
  

15	
  

20	
  

25	
  

30	
  

35	
  

Mortgage Aid Extended More an 32,000 Times 

to Mitigate Rising Foreclosures

Cleveland	
  MSA:	
  CumulaDve	
  Offers	
  of	
  Aid	
  by	
  Source	
  Compared	
  	
  

with	
  Foreclosures	
  Since	
  April	
  1,	
  2009	
  	
  (Thousands)	
  

FHA	
  Loss	
  MiDgaDon	
   Hamp	
  ModificaDons	
   EsDmated	
  Hope	
  Now	
  ModificaDons	
   Foreclosure	
  CompleDons	
  

Note:	
  	
  Data	
  on	
  Hope	
  Now	
  proprietary	
  mortgage	
  modificaDons	
  not	
  available	
  at	
  metropolitan	
  area	
  level.	
  However,	
  Hope	
  Now	
  Alliance	
  

reports	
  66,600	
  non-­‐HAMP	
  modificaDons	
  since	
  April	
  1,	
  2009	
  in	
  the	
  state	
  of	
  OH	
  of	
  which	
  	
  22	
  	
  percent	
  are	
  esDmated	
  by	
  HUD	
  to	
  have	
  

occurred	
  in	
  the	
  Cleveland	
  MSA.	
  

Sources:	
  	
  Departments	
  of	
  HUD	
  and	
  Treasury,	
  Hope	
  Now	
  Alliance,	
  and	
  Realty	
  Trac.	
  

Mortgage	
  Aid	
  Offers	
  in	
  Cleveland	
  MSA	
  from	
  	
  April	
  2009	
  through	
  July	
  2011:	
  32,300	
  

Foreclosure	
  CompleDons	
  Over	
  Same	
  Period:	
  	
  16,200	
  

This	
  approach	
  has	
  yielded	
  significant	
  results.	
  	
  For	
  example,	
  in	
  one	
  Cleveland	
  Census	
  block	
  group,	
  the	
  vacancy	
  rate	
  

dropped	
  by	
  nearly	
  40	
  percent	
  between	
  2008	
  and	
  2010.	
  So	
  far,	
  Cleveland	
  has	
  used	
  NSP1	
  funds	
  to	
  remove	
  the	
  

destabilizing	
  influence	
  of	
  86	
  properDes	
  and	
  to	
  rehabilitate	
  13	
  homes.	
  	
  

•	
  Building	
  on	
  the	
  success	
  of	
  their	
  partnership	
  using	
  NSP1	
  funds,	
  Cleveland	
  and	
  Cuyahoga	
  County	
  are	
  collaboraDng	
  on	
  

an	
  NSP2	
  program.	
  The	
  Cuyahoga	
  County	
  Land	
  ReuKlizaKon	
  CorporaKon,	
  a	
  consorDum	
  between	
  the	
  two	
  

jurisdicDons,	
  is	
  using	
  more	
  than	
  $40	
  million	
  in	
  funds	
  to	
  implement	
  a	
  comprehensive	
  revitalizaDon	
  program	
  designed	
  

to	
  stabilize	
  20	
  target	
  areas	
  hit	
  by	
  the	
  foreclosure	
  crisis.	
  One	
  of	
  the	
  key	
  components	
  of	
  this	
  innovaDve	
  NSP2	
  program	
  

is	
  the	
  eliminaDon	
  of	
  vacant	
  and	
  vandalized	
  properDes	
  in	
  an	
  environmentally	
  sustainable	
  manner.	
  With	
  funding	
  from	
  

the	
  City	
  of	
  Cleveland,	
  the	
  program	
  includes	
  a	
  deconstrucDon	
  project	
  developed	
  by	
  Urban	
  Lumberjacks	
  of	
  Cleveland.	
  	
  

Blighted	
  homes	
  are	
  removed	
  in	
  an	
  environmentally	
  sustainable	
  manner	
  through	
  the	
  careful	
  disassembly	
  of	
  

structures	
  so	
  that	
  parts	
  can	
  be	
  salvaged	
  and	
  reused.	
  	
  The	
  NSP	
  programs	
  are	
  also	
  providing	
  jobs	
  for	
  Cleveland	
  

residents.	
  

	
  	
  

•	
  The	
  City	
  of	
  Lakewood	
  recently	
  received	
  $250,000	
  in	
  NSP3	
  funds	
  from	
  the	
  Cuyahoga	
  County	
  Department	
  of	
  

Development.	
  The	
  Lakewood	
  Department	
  of	
  Planning	
  and	
  Development	
  submiged	
  a	
  proposal	
  through	
  a	
  compeDDve	
  

process	
  and	
  was	
  awarded	
  the	
  largest	
  dollar	
  amount	
  possible	
  in	
  this	
  round	
  of	
  funding.	
  The	
  NSP	
  money	
  along	
  with	
  

other	
  investments	
  by	
  the	
  city	
  will	
  be	
  targeted	
  to	
  a	
  core	
  part	
  of	
  Lakewood.	
  The	
  area	
  bounded	
  by	
  Ridgewood	
  and	
  

Clarence,	
  Detroit	
  and	
  Madison,	
  has	
  been	
  hard	
  hit	
  in	
  the	
  housing	
  crisis	
  and	
  this	
  money	
  will	
  go	
  a	
  long	
  way	
  toward	
  

acquiring	
  homes	
  that	
  have	
  been	
  abandoned	
  .	
  The	
  city’s	
  proposal	
  includes	
  obtaining	
  vacant	
  homes	
  for	
  rehabilitaDon	
  

on	
  Clarence	
  Avenue	
  and	
  also	
  invesDng	
  in	
  properDes	
  on	
  Alameda	
  and	
  Lakewood	
  Avenues.	
  

Overall,	
  $38.8	
  million	
  in	
  NSP1,	
  $40.8	
  million	
  in	
  NSP2,	
  and	
  $13.1	
  million	
  in	
  NSP3	
  funds	
  have	
  been	
  awarded	
  

to	
  these	
  nine	
  grantees	
  in	
  the	
  Cleveland	
  MSA.	
  	
  Local	
  authoriDes	
  in	
  Cleveland	
  devised	
  a	
  sophisDcated	
  

mapping	
  system	
  of	
  foreclosures	
  with	
  the	
  aid	
  of	
  Case	
  Western	
  Reserve	
  University,	
  which	
  provides	
  crucial	
  

detail	
  about	
  every	
  property	
  in	
  focus	
  areas	
  and	
  enables	
  the	
  jurisdicDons	
  in	
  the	
  MSA	
  to	
  act	
  strategically	
  in	
  

their	
  efforts	
  to	
  revitalize	
  neighborhoods.	
  Approximately	
  1,686	
  households	
  have	
  already	
  benefited	
  from	
  

NSP,	
  and	
  acDviDes	
  funded	
  by	
  the	
  program	
  are	
  expected	
  to	
  provide	
  assistance	
  to	
  an	
  addiDonal	
  5,451	
  

owner	
  and	
  renter	
  households.	
  Here	
  are	
  some	
  examples	
  of	
  how	
  these	
  funds	
  have	
  been	
  put	
  to	
  use:	
  	
  

	
  	
  

•	
  The	
  City	
  of	
  Cleveland,	
  in	
  partnership	
  with	
  Cuyahoga	
  County,	
  developed	
  an	
  innovaDve	
  NSP1	
  program	
  to	
  

improve	
  neighborhoods	
  by	
  removing	
  or	
  rehabilitaDng	
  foreclosed	
  properDes	
  in	
  communiDes	
  through	
  

concentrated	
  investments	
  and	
  the	
  leveraging	
  of	
  private	
  funds.	
  	
  The	
  program	
  was	
  implemented	
  through	
  

nonprofit	
  partnerships	
  with	
  proven	
  performance	
  records	
  and	
  builds	
  on	
  exisDng	
  neighborhood	
  plans.	
  	
  The	
  

City	
  of	
  Cleveland	
  had	
  roughly	
  18,000	
  vacant	
  lots,	
  about	
  5,000	
  of	
  which	
  were	
  land	
  banked.	
  The	
  vacant	
  lots	
  

had	
  the	
  effect	
  of	
  decreasing	
  property	
  values	
  and	
  the	
  quality	
  of	
  neighborhoods	
  for	
  residents.	
  	
  	
  One	
  of	
  the	
  

city’s	
  NSP1	
  programs	
  supports	
  a	
  pilot	
  land	
  reuse	
  iniDaDve.	
  Once	
  vacant	
  properDes	
  were	
  acquired,	
  the	
  

program	
  provided	
  grants	
  to	
  grassroots	
  neighborhood	
  groups,	
  churches,	
  schools	
  and	
  individuals	
  to	
  carry	
  

out	
  reclamaDon	
  projects.	
  	
  The	
  projects	
  will	
  be	
  maintained	
  by	
  the	
  community	
  groups	
  once	
  completed.	
  The	
  

city	
  selected	
  47	
  environmentally	
  sustainable	
  land	
  reuse	
  projects	
  that	
  are	
  being	
  conducted	
  on	
  125	
  vacant	
  

parcels	
  of	
  land	
  held	
  by	
  Cleveland’s	
  Land	
  ReuDlizaDon	
  Program.	
  Twenty-­‐five	
  projects	
  focus	
  on	
  urban	
  

agriculture	
  and	
  are	
  coordinated	
  by	
  The	
  Ohio	
  State	
  University	
  Extension.	
  	
  ParkWorks	
  Inc.	
  coordinates	
  

twenty-­‐two	
  groups	
  that	
  focus	
  on	
  urban	
  greening.	
  	
  AddiDonal	
  funding	
  for	
  this	
  pilot	
  program	
  was	
  received	
  

from	
  the	
  Surdna	
  FoundaDon	
  and	
  in-­‐kind	
  services	
  were	
  received	
  from	
  the	
  USEPA	
  Brownfield	
  Program,	
  

among	
  others.	
  

Cleveland MSA NSP Acti vity (Housing Units) Projected Completed

NSP1 Total 4012 1407

Clearance and demoliti on 1457 847

Homeownership assistance to low- and 

moderate-income 32 14

Rehabilitati on/reconstructi on of 

residenti al structures 2523 546

NSP2 Total 2225 4

Rehabilitati on/reconstructi on of 

residenti al structures 605 0

NSP3 Total 1620 4

Clearance and demoliti on 875 0

Constructi on of new housing 432 0

Homeownership assistance to low- and 

moderate-income 56

Rehabilitati on/reconstructi on of 

residenti al structures 387 0

Given over three rounds, the Neighborhood Stabilization Program has 

invested $7 billion nationwide to help localities work with non-profi ts and community 

development corporations to turn tens of thousands of abandoned and foreclosed 

homes that drag down property values into homeownership opportunities and the 

affordable rental housing communities need.

Eight jurisdictions in the Cleveland MSA have received NSP grants: the cities of 

Cleveland, East Cleveland, Elyria, Euclid, and Lorain and the counties of Cuyahoga, 

Lake, and Lorain. The Cuyahoga County Land Reutilization Corporation, a 

consortium between the City of Cleveland and Cuyahoga County, has also received 

an NSP grant.

Overall, $38.8 million in NSP1, $40.8 million in NSP2, and $13.1 million in NSP3 

funds have been awarded to these nine grantees in the Cleveland MSA. Local 

authorities in Cleveland devised a sophisticated mapping system of foreclosures 

with the aid of Case Western Reserve University, which provides crucial detail 

about every property in focus areas and helps the jurisdictions in the MSA to act 

strategically in their efforts to revitalize neighborhoods. Approximately 1,411 

households have already benefi ted from NSP, and activities funded by the program 

are expected to provide assistance to an additional 5,701 owner and renter 

households. Here are some examples of how these funds have been put to use: 

Foreclosure Completi on Rates in the Cleveland MSA

Area

Second Quarter 2011 Since April 1, 2009

Foreclosure 

Completi ons

Foreclosure 

Rate

Foreclosure

Completi ons

Foreclosure 

Rate

Cleveland 

MSA 690 0.1% 16,200 1.7%

Nati on 203,876 0.2% 2,203,386 1.7%

Note: Foreclosure Rates as Percent of All Housing Units; Data through July 

2011 for Foreclosures since 2009

Source: Realty Trac and Census Bureau

Foreclosure	
  

Completions Foreclosure	
  Rate Foreclosure	
  

Completions Foreclosure	
  Rate

SA	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  690	
   0.1% 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  16,200	
   1.7%

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  203,876	
   0.2% 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  2,203,386	
   1.7%

ure	
  Rates	
  as	
  Percent	
  of	
  All	
  Housing	
  Units;

rough	
  July	
  2011	
  for	
  Foreclosures	
  since	
  2009

Trac	
  and	
  Census	
  Bureau

Foreclosure	
  Completion	
  Rates	
  in	
  the	
  Cleveland	
  MSA

Second	
  Quarter	
  2011 Since	
  April	
  1,	
  2009

n Mortgage Delinquencies and Foreclosures:	
  	
  	
   

rs	
  in	
  Cleveland	
  have	
  struggled	
  with	
  high	
  levels	
  of	
  mortgage	
  delinquency	
  and	
  foreclosure.	
  	
  As	
  of	
  July	
  

eveland	
  MSA	
  ranked	
  42nd in	
  the	
  naSon	
  for	
  the	
  highest	
  percentage	
  of	
  mortgages	
  that	
  were	
  90	
  or	
  more	
  

uent	
  or	
  in	
  the	
  process	
  of	
  foreclosure,	
  according	
  to	
  LPS	
  Applied	
  AnalyScs.	
  	
  Through	
  the	
  efforts	
  of	
  

tate	
  and	
  local	
  enSSes	
  in	
  partnership	
  with	
  the	
  federal	
  government,	
  the	
  number	
  of	
  mortgages	
  at	
  risk	
  of	
  

(90	
  or	
  more	
  days	
  delinquent	
  or	
  in	
  the	
  process	
  of	
  foreclosure)	
  in	
  the	
  Cleveland	
  area	
  declined	
  

	
  (9.6	
  percent	
  of	
  all	
  mortgages)	
  in	
  July	
  2010	
  to	
  18,975	
  (8.7	
  percent)	
  in	
  July	
  2011,	
  compared	
  with	
  a	
  

decline	
  from	
  7.5	
  to	
  6.8	
  percent.	
  CoreLogic	
  data	
  show	
  that	
  the	
  share	
  of	
  distressed	
  mortgages	
  (90	
  or	
  

elinquent)	
  has	
  been	
  high	
  in	
  Cleveland	
  for	
  a	
  considerable	
  length	
  of	
  Sme.	
  Since	
  peaking	
  in	
  	
  February	
  

percent,	
  90-­‐plus-­‐day	
  delinquency	
  rates	
  have	
  fallen	
  to	
  7.8	
  percent.	
  This	
  compares	
  with	
  a	
  	
  naSonal	
  

m	
  8.5	
  percent	
  to	
  7.2	
  percent	
  over	
  the	
  same	
  period. Realty	
  Trac	
  data	
  show	
  that	
  completed	
  foreclosures	
  

eclined	
  in	
  Cleveland	
  over	
  the	
  past	
  year,	
  dropping	
  from 1,840	
  in	
  the	
  second	
  quarter	
  of	
  2010	
  to	
  690	
  in	
  the	
  

rter	
  of	
  2011,	
  although	
  lender	
  process	
  reviews	
  conSnue	
  to	
  affect	
  foreclosure	
  compleSons	
  locally	
  and	
  

Currently,	
  27	
  percent	
  of	
  mortgages	
  in	
  the	
  Cleveland	
  MSA	
  have	
  negaSve	
  equity	
  compared	
  with	
  23	
  

onally	
  according	
  to	
  CoreLogic	
  -­‐-­‐	
  represenSng	
  more	
  homeowners	
  and	
  loans	
  potenSally	
  at	
  risk.	
  	
  

5.0	
  

5.5	
  

6.0	
  

6.5	
  

Year	
  and	
  Quarter	
  

Source:	
  Reis,	
  Inc.	
   Cleveland	
  MSA	
   NaSon	
  

s:	
  CoreLogic,	
  HUD/Census	
  	
  Bureau,	
  and	
  NaSonal	
  AssociaSon	
  of	
  Realtors	
  

0	
  

1	
  

2	
  

3	
  

4	
  

5	
  

6	
  

7	
  

8	
  

9	
  

10	
  

Cleveland	
  MSA	
   NaSon	
  

Source:	
  CoreLogic	
  

Share of Distressed Mortgages Rose Earlier an in the Nation 

 and Now Declining 

Mortgages	
  90+	
  Days	
  Delinquent	
  (Percent	
  of	
  all	
  Mortgages)	
  
 e Obama Administration’s E orts to Stabilize  e Housing Market and Help American Homeowners | September 2011 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

U.S. Department of the Treasury

Spotlight on Cleveland MSA | Page 4

• The City of Cleveland, in partnership with Cuyahoga 

County, developed an innovative NSP1 program to improve 

neighborhoods by removing or rehabilitating foreclosed 

properties in communities through concentrated investments and 

the leveraging of private funds. The program was implemented 

through nonprofi t partnerships with proven performance records 

and builds on existing neighborhood plans. The City of Cleveland 

had roughly 18,000 vacant lots, about 5,000 of which were land 

banked. The vacant lots had the effect of decreasing property 

values and the quality of neighborhoods for residents. One of the 

city’s NSP1 programs supports a pilot land reuse initiative. Once 

vacant properties were acquired, the program provided grants to 

grassroots neighborhood groups, churches, schools and individuals 

to carry out reclamation projects. The projects will be maintained 

by the community groups once completed. The city selected 47 

environmentally sustainable land reuse projects that are being 

conducted on 125 vacant parcels of land held by Cleveland’s 

Land Reutilization Program. Twenty-fi ve projects focus on urban 

agriculture and are coordinated by The Ohio State University 

Extension. ParkWorks Inc. coordinates twenty-two groups that 

focus on urban greening. Additional funding for this pilot program 

was received from the Surdna Foundation and in-kind services 

were received from the USEPA Brownfi eld Program, among others. 

This approach has yielded signifi cant results. For example, in one 

Cleveland Census block group, the vacancy rate dropped by nearly 

40 percent between 2008 and 2010. So far, Cleveland has used 

NSP1 funds to remove the destabilizing infl uence of 86 properties 

and to rehabilitate 13 homes. 

• Building on the success of their partnership using NSP1 funds, 

Cleveland and Cuyahoga County are collaborating on an NSP2 

program. The Cuyahoga County Land Reutilization 

Corporation is using more than $40 million in funds to implement 

a comprehensive revitalization program designed to stabilize 20 

target areas hit by the foreclosure crisis. One of the key components 

of this innovative NSP2 program is the elimination of vacant and 

vandalized properties in an environmentally sustainable manner. 

With funding from the City of Cleveland, the program includes 

a deconstruction project developed by Urban Lumberjacks of 

Cleveland. Blighted homes are removed in an environmentally 

sustainable manner through the careful disassembly of structures 

so that parts can be salvaged and reused. The NSP programs are 

also providing jobs for Cleveland residents.

• The City of Lakewood recently received $250,000 in NSP3 

funds from the Cuyahoga County Department of Development. The 

Lakewood Department of Planning and Development submitted 

a proposal through a competitive process and was awarded the 

largest dollar amount possible in this round of funding. The NSP 

money along with other investments by the city will be targeted to 

a core part of Lakewood. The area bounded by Ridgewood and 

Clarence, Detroit and Madison, has been hard hit in the housing 

crisis and this money will go a long way toward acquiring homes 

that have been abandoned. The city’s proposal includes obtaining 

vacant homes for rehabilitation on Clarence Avenue and also 

investing in properties on Alameda and Lakewood Avenues.

As part of the State of Ohio’s housing recovery efforts, the Restoring 

Stability: A Save the Dream Ohio Initiative helps Ohio 

homeowners struggling to make their monthly house payments or those 

who have already fallen behind on their mortgage. Through the program, 

the Ohio Housing Finance Agency (OHFA) is administering $570 million 

from the Administration’s Hardest Hit Fund to help families avoid 

foreclosure. 

The Restoring Stability programs include:

Rescue Payment Assistance: The Rescue Payment Assistance 

program provides payments to mortgage servicers to help delinquent 

homeowners who can demonstrate a fi nancial hardship become current 

on their mortgages. The payments can cover principal, interest, fees, 

delinquent taxes or escrow shortage and homeowners insurance. 

Homeowners need to demonstrate the ability to make future mortgage 

payments for at least six months. Rescue Payment Assistance is structured 

as a zero-interest, deferred payment loan that is forgiven over fi ve years, 

or repaid from sales proceeds if the home is sold sooner.

Partial Mortgage Payment Assistance: This program provides 

partial mortgage payments while unemployed homeowners search for 

a job or participate in job training. Through the program, homeowners 

are required to make affordable monthly payments of no less than 25% 

of their current total monthly payment. Restoring Stability covers the 

remainder of the payment. Partial Mortgage Payment Assistance is 

structured as a zero-interest, deferred payment loan that is forgiven over 

fi ve years, or repaid if the home is sold or the loan is refi nanced sooner.

Modifi cation Assistance with Principal Reduction: The 

program provides a payment incentive to mortgage servicers to reduce 

a participating homeowner’s mortgage principal to the level necessary 

to achieve a loan modifi cation for an affordable monthly mortgage 

payment -- ideally down to a 115% loan-to-value ratio or less. The 

mortgage servicer will need to agree to provide principal forbearance 

or forgiveness equal to or greater than the Restoring Stability payment. 

As a result of this assistance, the homeowner should be able to qualify 

for a loan modifi cation through the Administration’s Home Affordable 

Modifi cation Program (HAMP) or other programs that can make the 

monthly mortgage payment even more affordable. The principal 

reduction provided by Restoring Stability is structured as a zero-interest, 

deferred payment loan that is forgiven over fi ve years, or repaid if the 

home is sold or the loan is refi nanced sooner.

Transitional Assistance: The Transitional Assistance program 

provides homeowners who cannot sustain homeownership with an 

alternative to foreclosure by offering an incentive to mortgage servicers 

to complete short sales or deed-in-lieu of foreclosure agreements. 

Transitional Assistance allows homeowners to exit their homes if they 

have exhausted all other options for maintaining homeownership or if 

they need to relocate to gain meaningful employment. If necessary, the 

plan may also make an incentive payment to a second lien holder to 

release other liens on the property. 

To date, over 150 mortgage servicers have agreed to participate in 

at least one of the Restoring Stability programs. The programs make 

extensive use of local HUD-approved housing counseling agencies 

to help homeowners access the program and apply for assistance. 

Ohio homeowners who believe they may be eligible can visit www.

savethedream.ohio.gov. Ohio has these funds available until 2017 (or 

until all funds are utilized to assist struggling homeowners) to prevent 

avoidable foreclosures.