WORK GROUP ANNOUNCES COORDINATED RESPONSE TO GROWING FORECLOSURE CRISIS
(5/1/2008) NEW HAVEN- During a news conference today, a work group led by Mayor John DeStefano, Jr. and representatives of the Yale Law Clinic, the Greater New Haven Community Loan Fund, Neighborhood Housing Services of New Haven and other community organizations, announced a coordinated response to the increasing number of home foreclosures in New Haven.
“The foreclosure crisis is affecting communities nationwide,” said DeStefano. “But in New Haven, we’re working together to minimize the impact, help families before they reach the point of foreclosure and educate our residents about creating wealth, understanding what they can afford and making trusted counseling services available to families in trouble. This project involves a number of strong partners reaching out to families in need and helping to protect the vitality of our neighborhoods.”
DeStefano convened this group in October to understand the scope of the foreclosure problem locally, regionally, and nationally. By year end, the workgroup had designed a coordinated response entitled the Real Options, Overcoming Foreclosures (ROOF) Project. ROOF is built on a network of existing groups, community organizations, faith-based groups, and public and private resources.
“The ROOF Project coordinates existing resources in order to meet this community
Challenge,” said Robin Golden representing the Yale Law School Clinic. “It has been incredibly rewarding to see how everyone is working together on this issue including city employees, Yale students and faculty, Aldermen, faith-based leaders, counseling agencies and other community Organizations.”
ROOF will focus on both prevention and intervention by helping borrowers before foreclosures are filed, providing essential assistance to borrowers in foreclosure and returning foreclosed properties to responsible use as quickly as possible.
Since 2005, residential foreclosure filings have increased by over 130%, mostly among owner-occupied homes and disproportionately within the City’s most vulnerable neighborhoods. New Haven is likely to face even greater problems in the coming months—20% of all loan originations from 2005 to 2007 were sub-prime adjustable rate mortgages. Most of these mortgages are scheduled to reset to higher interest rates between now and December 2009. In the past year, New Haven has experienced a 63% increase in vacant and abandoned properties. This is the first increase since 1996. And one-third of these 199 newly vacant properties involved a foreclosure action.
There are approximately 4000 subprime mortgage loans in New Haven currently. Foreclosure filings have increased 130% in the past 2 years, and almost 60% from 2006 to 2007. Fair Haven, Hill, Newhallville are highest affected neighborhoods in the City. The top 6 neighborhoods account for almost 60% of foreclosure auctions and lis pendens filings, and they include Fair Haven, the Hill, Newhallville, Quinnipiac Meadows, the Annex, and Beaver Hills. One-fifth of all residential mortgages made in New Haven in the past 2 years were ARMs.
At today’s event, ROOF organizers expressed concerns that inaction on this issue could lead to: a decrease in homeownership, economic loss to families, losses to the local tax base, increase in absentee landlords, further deterioration of housing stock, downward spiral in property values and a potential increase in crime and vandalism due to vacant buildings and neighborhood blight.
“The single most important thing to do to avoid foreclosure is to be proactive and to seek out HUD approved counseling agencies that specialize in Mortgage Delinquency counseling at no cost and avoid scam artists that charge up front fees. Remember: don't get caught doing nothing,” advised Bridgette Russell of Neighborhood Housing Services.
The project is led by a Steering Committee headed by DeStefano and Carla Weil, Executive Director of the Greater New Haven Community Loan Fund, Inc. as well as an Assistance Team comprised of loss mitigation counseling organizations and other social service providers that serve the greater New Haven area. The team meets monthly to share best practices and strategize on how to make adjustments to meet shifting challenges.
Key goals of the project are to:
- Keep homeowners in their homes
- Reduce the financial and personal costs to families where continued homeownership is not possible
- Reduce the negative impact of multiple foreclosures on some of New Haven’s most vulnerable neighborhoods
- Preserve affordability of housing
- Refine aspects of the program to be used as models for other hard hit urban areas
“Our main message is that no one has to go through this alone. If you are in trouble with your mortgage, there are people who want to work with you to help you find the best options available to you,” said Weil. “To counteract the negative effects that abandoned foreclosed properties can have on a block or a neighborhood, we are working on raising funds so we can purchase strategic properties and get them back into the hands of responsible new owners.”
The program will base its efforts on three main points:
1. Outreach: Designed to educate borrowers on how best to manage their loans and avoid foreclosure through public events, media, and mailings.
2. Assistance: The priority of the assistance team is to help citizens find the help
they need to navigate their mortgage challenges. The team is focused on increasing counseling resources so that each at-risk borrower will have help renegotiating better terms on mortgages, orchestrating pre-foreclosure sales, and understanding rental options in New Haven. Through the work of the Assistance Team, they will identify issues that require intervention directly with servicers or policymakers. Strategic litigation will be used as needed. In addition, legal advocacy will be used to directly support the efforts of counselors with individual borrowers.
3. Neighborhood Stabilization: In collaboration with national foundations and leading community development organizations, the project will focus on raising funds and connecting local organizations to financers in order to purchase and preserve properties for affordable homeownership and well-managed affordable rental.
Residents in need of counseling or other assistance to avoid a foreclosure are encouraged to call 211 (the United Way hotline) where they will be referred to a ROOF partner for assistance. General inquiries about this program can be made at 203-789-8690.
Contact Name: Jessica Mayorga
Contact Email: firstname.lastname@example.org
Contact Phone: 203-946-7660