October 10, 2013; Stateline
The economy is on the upswing, right? The housing market has turned around, right?
Not as indicated by the latest data on bank repossessions of foreclosed homes. While homes entering the foreclosure process are down nationally to their lowest level in seven years, foreclosures are up significantly in Maryland and Oregon. Nationally, repossessions rose seven percent in the third quarter, as compared to the previous quarter nationally, with significant increases in Kentucky and New York. Compared to the third quarter of last year, bank repossessions are up significantly in New York, New Jersey, Illinois, Virginia, Connecticut, and Indiana.
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Sometimes, these percentages don’t reveal the human story. Think about this: In the third quarter of 2013, 174,000 homes entered the foreclosure process. The rate of foreclosures increased recently in the Tri-Cities region of Illinois by 124 percent. The Hampton Roads, Virginia, area saw a sharp increase in foreclosures between August and September. Not surprisingly, foreclosures in the metropolitan Washington, D.C., area have skyrocketed as a result of budget cuts, a story that will probably be exacerbated by the shutdown. In the midst of aggregate indicators, sometimes the impact of economic changes in smaller geographies gets lost. Nonprofits know better than the aggregate numbers suggest where the economy isn’t progressing or might be regressing.
That might explain why Boston Community Capital recently announced that it was expanding its operations into Maryland. Boston Community Capital’s program involves using private and foundation moneys to buy mortgages from lenders at market value, then sell the properties back to the owner-occupants and provide a 30-year mortgage at roughly two or two-and-a-half percent above the national average for mortgages, helping owners that might not have been able to stay in their homes, much less find a private lender to help them refinance. “It’s a really solid program. We are really happy to see them come,” Marceline White, executive director of the Maryland Consumer Rights Coalition, told the Baltimore Sun. “It keeps people in their homes and gets them out of their toxic home loans…”
One crucial role of nonprofits is in providing a micro-understanding of foreclosure and repossession dynamics. In Brooklyn’s Canarsie neighborhood, nonprofits have watched as the foreclosure dynamic has been abetted by the long-term effects of Superstorm Sandy. “The mortgage crisis is only getting worse in Canarsie, and it’s been exacerbated by Sandy,” said Angella Davidson, the manager of the foreclosure prevention program of Neighborhood Housing Services of East Flatbush. “People who already were struggling to pay their mortgage are now falling further behind, because they’re using money that should be earmarked for their mortgage to replace boilers and sheetrock. And Sandy has forced people who were not in foreclosure to face potential foreclosure.” NHS and other nonprofits helps homeowners stay in their homes by trying to get banks to renegotiate their loan terms, but still, ten percent of 1–4 family homes in the Canarsie zip code were in foreclosure as of June.
The national patter about the U.S. economy being in a recovery does not reflect the reality of many parts of the nation—and more importantly, many potential mortgagors—that times are still very difficult.—Rick Cohen