Archive for the 'Ohio' Category

Nine cities along Ohio’s Mahoning River have agreed to meet this week to plan their first nine-city collaborative effort to address the issue of foreclosure properties.

Officials from the nine cities will gather at the conference facility of the Youngstown City Council to discuss how they can mitigate the effects of foreclosure properties on neighborhoods and how to reduce the area’s 3.31 foreclosure rate in April, which is almost twice the nation’s 1.8 percent average foreclosure rate.

City officials will also discuss how they can convince the federal Department of Housing and Urban Development to provide them with a bigger share from the $1.93 billion second-round funding for the Neighborhood Stabilization Program.

Cities can make requests for NSP funding ranging from $5 to $50 million for the purchase of foreclosure properties, demolition of dilapidated houses, repair of abandoned homes and redevelopment of vacant properties.

HUD also requires that targeted areas should have an HUD foreclosure ranking of 18 to 20 and that more than 51 percent of households in proposed areas should be earning 120 percent or less than the median income in the areas targeted.

Bill D’Avignon, head of Youngstown’s Community Development Agency, said that according to HUD estimates, 59 percent of residents in Mahoning and Trumbull counties meet the income requirement. In the two counties, families of four should not be earning more than $62,520 in order for the counties to qualify for NSP funds.

D’Avignon also said that although cities could ask for $30 to $50 million, the HUD will base the final amount to allocate to cities on the capacities of cities to use and monitor the funding to rehabilitate foreclosure properties within a period of three years.

He also informed his fellow officials that they need to show HUD that they are able to administer and monitor the use of the money.

Youngstown’s Community Development Agency will become the lead agency, but all other agencies including housing authorities in Youngstown and Warren and nonprofits such as Sunshine and Habitat for Humanity can participate as long as they can show that they are able to handle the funds.

Michael Keys, leader of Warren Community Development, added that his agency is going to meet with nonprofits that have shown their ability to deal with building contractors and to manage rehabilitation projects through past projects.

Hopes are high that the nine cities will receive funding as a group and will be able to solve the issue of foreclosure properties in the Mahoning River region.

County Corp. in Ohio is intensifying its efforts to stop the spread of REO property in the state. Former mortgage broker Alfred Patterson Jr. is leading the County Corp.’s outreach efforts which aim to help troubled homeowners remain their homes and avoid turning their houses into REO property.

According to Patterson, everyone involved in the real estate market loses when a property is foreclosed, including the lender or bank, homeowner, neighborhood and tax collector.

Homeowners because they will lose their properties which they worked hard to acquire, banks because they incur losses and neighborhoods because abandon and vacant properties are eyesores and reduce the value of other houses in the area.

Dayton’s Housing and Neighborhood Development Manager Aaron Sorrell likens the foreclosure crisis to the 1913’s Great Depression. To address the growing foreclosure problem, Dayton has allotted $4.5 million in federal and state funds to demolish deteriorating abandoned foreclosed properties in some neighborhoods.

A study by the Mortgage Bankers Association (MBA) showed about 12 percent of homeowners defaulted on their mortgage payments or are at risk of foreclosures and the number keeps increasing as the crisis spreads to those with good credit.

According to the MBA, the delinquency rate in the country increased to 9.12 percent, seasonally adjusted, while loans on the brink of foreclosure jumped to 1.34 percent.

Because of this unabated flood of REO property in the market, County Corp. has created a foreclosure prevention plan customized for each household. The REO property prevention plan will depend on whether loans originated with government-sponsored agencies Federal Home Loan Mortgage Corp. or Federal National Mortgage Association, Veterans Administration of subprime lenders.

The funding for the program comes from the Ohio Housing Trust Fund which is created to help distressed homeowners transition into affordable loan terms.

Under Patterson’s strategy, he will make contact with distressed homeowners in church get-togethers, neighborhood and civic groups and by making personal calls.

He explained that his experience as a mortgage broker showed him how even rational, competent and intelligent people are not spared from the impact of foreclosure because they do not know the exact conditions of their loans.

Currently, the Homesaver REO property prevention program of County Corp. failed to meet its target of about 2,000 distressed homeowners who will be saved from foreclosures. Only 237 homeowners responded to the company’s appeal to avail of the Homesaver program.