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NCP Foreclosure Response Fund:
Lessons learned, more work ahead

They innovated. They negotiated. They built productive coalitions, and they raised a little hell.

But as they look back on two years of activity funded by the LISC/NCP Foreclosure Response Fund, neighborhood leaders concede their efforts, though well worth the investment, were hardly enough to stem the tidal wave of failed mortgages still eroding their communities.

Photo: John McCarron

Tameeka Christian of NCP lead agency Lawndale Christian Development Corp. takes notes during the meeting of leaders who administered the NCP Foreclosure Response Fund.

Valuable lessons are being learned, however, so while the main MacArthur-funded program winds down at year’s end, there is now a platform in place, and tested tactics at the ready, to continue the fight as more funds become available.

“We are very interested in supporting this very innovative work, from organizing to policy development, that has come out of this so far,” said Marva Williams, the senior program officer who administered the $319,000 fund for LISC/Chicago.

This past fall Williams led a workshop at Roosevelt University at which NCP lead agencies and their community partners shared lessons learned in the foreclosure fight and, as important, ideas for carrying the work forward.

Unimaginable damage
One thing came through loud and clear – the foreclosure crisis isn’t going away anytime soon. It is, however, changing in nature.

Sarah Duda, research and project associate at the Woodstock Institute, began the workshop with a sober summary of the scale and scope of the problem:

·      Chicago saw a 14 percent increase in foreclosure filings in the first half of 2010 over the first half of 2009.

·      New foreclosure filings appear to have peaked in poor, minority neighborhoods where sub-prime loans had their earliest and worst impact. First-half 2010 filings, for instance, were down 17 percent in Englewood and West Englewood, where one of every four dwelling units is in foreclosure.

·      Job losses and plunging home prices have shifted the worst increases to relatively affluent neighborhoods and suburbs, with first half vs. first half   foreclosure filings in Rogers Park up 71 percent and DuPage County up 75 percent.

·      Almost two-thirds of Chicago’s vacant, lender-owned properties (REOs) are located in predominantly African-American neighborhoods, where property values have experienced twice the decrease (minus 35 percent) as primarily white neighborhoods (minus 17 percent.)

·      The federal government’s main program to avert foreclosures by subsidizing mortgage modifications – the Home Affordable Mortgage Program, or HAMP – has fallen short of expectations, with only one-half million “mods” completed nationally, compared to the initial goal of 3 million to 4 million.

·      Now that the pace of filings is subsiding in inner-city neighborhoods, the problem becomes one of salvaging, repairing and re-occupying thousands of empty dwellings before they drag down entire neighborhoods.

A panel of three foreclosure fighters next told how Foreclosure Response funds are being leveraged to slow the destructive tide at the neighborhood level.

SWOP’s effort

Photo: Gordon Walek

“Our neighborhoods are crumbling around us, and we’re reaching these numbers, and we can’t be satisfied with them," said Jeff Bartow, executive director of SouthWest Organizing Project. "Scale is our challenge.”  

Jeff Bartow, executive director of the Southwest Organizing Project (SWOP), explained how NCP’s Greater Southwest neighborhoods – hit by more than 8,000 foreclosures over the last three years – have fought back.

“We have a good campaign on the ground called Keep Our Homes, a partnership with SWOP, Greater Southwest Development Corporation and Neighborhood Housing Services,” he said. “Through counseling and modification we’ve been able to keep 300-plus people in their homes. Through organizing we’ve worked an agreement with Bank of America … that will keep probably another 80 families in their homes.”

“That’s nothing to blink at, but compared to the scale of the challenge, that’s incredibly frustrating, right?” Bartow added. “Our neighborhoods are crumbling around us, and we’re reaching these numbers, and we can’t be satisfied with them. Scale is our challenge.”

Renters had “no clue”
John Bartlett, executive director of the Metropolitan Tenants Organization, outlined what his organization has done to advocate for new laws protecting renters from summary evictions and to alert tenants to their rights.

Beginning in 2006, Bartlett said, MTO experienced a “huge increase” in the number of foreclosure-related calls on its tenants’ hotline. Many were from renters whose first inkling of trouble occurred “when sheriff’s deputies knocked on their apartment door and said ‘You’ve got to get out,’ or a letter from a [loan servicing agent] arrived saying, ‘You have five days to move.’ ”

Photo: John McCarron

The Metropolitan Tenants Organization experienced a huge increase in calls to its hotline starting in 2006 as sheriff's deputies preparing to foreclose on buildings showed up at their door to tell them to start packing. "So many had no clue," said John Bartlett, executive director. 

Thanks to advocacy efforts by MTO and others, he said, there are now state and municipal laws requiring 90 days notice before someone can be evicted following a foreclosure.

MTO also partnered with the Garfield Park Conservatory Alliance, an NCP lead agency, in a door-to-door canvass of foreclosed buildings. Outreach workers alerted tenants of the situation, and of their rights, which include refund of security deposits by the foreclosing lenders as provided under a new city ordinance. Said Bartlett: “So many had no clue.”

Court mediation win
Marcelo Ferrer, foreclosure prevention specialist with the Logan Square Neighborhood Association, said his community had 509 foreclosure filings in 2009, and nearly half involved multi-unit buildings.

So LSNA, helped by a $50,000 grant from the Response Fund, has evolved a dual approach with programs for endangered owners and for renters facing eviction. These have included outreach to at-risk borrowers, prompting hundreds to seek help from HUD-certified mortgage counselors.

LSNA, an NCP lead agency, also partnered with a citywide group of community-based organizations to advocate for, and gain passage of, a $3.5 million foreclosure mediation program run by the Cook County Circuit Court.

The next big push, Ferrer said, should be to require lenders and their agents to maintain foreclosed properties so growing numbers of vacant hulks won’t drag down entire blocks and, ultimately, entire communities.

After the panel’s presentation, the 25 attendees split into three small-group discussions and brainstormed about what could be done to scale-up efforts to match the enormity of the problem.

Dozens of ideas surfaced, from requiring lenders to maintain foreclosed properties to requiring lenders to reduce principal owed, not just stretch out the payments.

Who’s accountable?
How do we begin to assess the cost, on the ground, of what’s happening?” asked SWOP’s Jeff Bartow.  “How do we begin to hold the responsible entities accountable?”

The mortgage industry has asserted that high rates of unemployment, not lender intransigence, is behind slow progress on loan modifications.

“Increase in unemployment directly impacts mortgage delinquencies,” said Jay Brinkmann, chief economist for the Mortgage Bankers Association, in a recent statement. He added that “some percentage of the loans modified over the last several years have become delinquent again because those borrowers, by definition, have weak credit.” 

But neighborhoods awash in foreclosed or mortgage-delinquent properties can’t wait for a general economic rebound. Their problems – from vacant and vandalized properties to displaced and dispirited families – are immediate threats requiring immediate interventions.  

LISC/Chicago’s Marva Williams said that, with the end of Response Fund grant-making, new ways must be found to continue the work and apply lessons learned.

“We need to develop priorities,” Williams said. “What is achievable? Where do we think we can have an impact? How do we reach out to other programs that exist? How do we create peer networks around organizing and advocacy?”

“This problem,” she said, “is tearing at the fabric of our communities.”

More information: Marva Williams, mwilliams@lisc.org

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