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Foreclosure Prevention at Ground Zero

Foreclosure Prevention at Ground Zero. Planning and implementing a comprehensive response. The Perfect Storm. Population decline - weak demand Surplus of obsolete post WWII houses State refused to rein in predatory lenders

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Foreclosure Prevention at Ground Zero

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  1. Foreclosure Preventionat Ground Zero Planning and implementing a comprehensive response

  2. The Perfect Storm • Population decline - weak demand • Surplus of obsolete post WWII houses • State refused to rein in predatory lenders • Result – inappropriate refinancing and purchase mortgages, exploding ARM’s, stated income buyers, equity stripping • Wave of foreclosures started in 2004

  3. Starting Out Slow • Turf fights among counseling agencies • Cleveland fighting its own battles • Suburban leaders don’t see any problem • Foreclosure backlog grows to 18 months

  4. Seizing the Day • Suburban mayors get organized • Elected officials agree to work together • Development and Treasurer lead the way • County Commissioners put up $1 million local property tax revenue over 3 years • Funding forces nonprofits to cooperate • Key decision – use “211” referral system

  5. Program Design • “Don’t Borrow Trouble” media outreach • Centralized referrals through “211” line • Mandatory HUD counseling certification • Free mandatory counselor training • Emphasis on workout negotiations • Rescue fund loans to “seal the deal” • Academic evaluations for three years

  6. Signs of Hope • Direct access to all major workout shops • Over 2250 foreclosures prevented to date • Loan workout rate up to 42% by year 2 • Built capacity to fully use extra counseling funding available through Neighborworks • Won State approval to use accumulated property tax penalties for rescue loans

  7. What’s Next? • Permanent foreclosure prevention office • Foreclosure recovery – financial literacy • Transition help for those who must move • Judicial mediation linked with counseling • Community recovery from vacancies

  8. Online Information Academic evaluation reports: urban.csuohio.edu/civic_education/publications/foreclosures_11_06.pdf urban.csuohio.edu/civic_education/publications/foreclosures_05_12_08.pdf Program summary for NACCED award: www.nacced.org/awards/awards2007.pdf (pages 13-14)

  9. Contact Information Mark Wiseman, Director Cuyahoga County Foreclosure Prevention mwiseman@cuyahogacounty.us (216) 443-7461 Paul Herdeg, Housing Manager Cuyahoga County Dept. of Development pherdeg@cuyahogacounty.us (216) 443-7257

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