For Immediate Release

May 25, 2005

Contact: Carissa Cardone,

312-751-0147, x223; or

Becky Fleischauer; NeighborWorks America, 202-220-2360

 

 

Ohio NeighborWorks® Groups Team Up to Prevent Foreclosures

 

(Ohio) – Thousands of Ohio residents on the brink of losing their homes and thousands more new homebuyers tempted to take excessive risks that lead to foreclosure will soon get some much-needed help. NeighborWorks America is launching an initiative in Ohio to identify the most common causes of foreclosure and deploy effective prevention and intervention strategies. Ten NeighborWorks organizations across the state are teaming up to develop the program. 

 

The organizations will work together with NeighborWorks America over the next nine months to develop some of the most effective intervention and prevention strategies.  These strategies include public education, counseling, pre-purchase education, and partnerships with lenders to avert foreclosure.

 

“Ohio has the highest percentage of homeowners in foreclosure or with payments that are 90 days or more behind — a rate that is 65 percent higher than the national average,” said Paul Poston, NeighborWorks Director for the Great Lakes district. “With Ohio’s softening housing market, this alarming trend puts millions of dollars in equity and property values, neighborhood safety and economic development at risk,” Poston said.

The Chicago Department of Housing reports that it costs lenders on average $50,000 each time they write off a foreclosure. With nearly 60,000 foreclosures reported in Ohio in 2003, as much as $300 million was lost. “This does not include the loss of value for surrounding properties or the cost of public services tied to dealing with vacant properties,” Poston said.  “Not to mention the personal toll foreclosures take on individuals.”

 

In February 2005 the Federal Reserve Bank of Cleveland and NeighborWorks sponsored a statewide forum to rally stakeholders around the benefits of addressing this growing problem. Researchers listed the top factors contributing to Ohio’s rise in foreclosures: job loss, unexpected house repair costs and other expenses for new homebuyers, growing credit and debt problems, increasing subprime and predatory lending practices, lack of knowledge about options, and a soft housing market. 

According to a survey of lenders, more than half of those in foreclosure did not call for help when they fell behind in their mortgage payments. “This is one of the most important factors in preventing foreclosures,” said NeighborWorks CEO Kenneth Wade. “People are hesitant to call lenders and are suspicious that collections agencies are not acting in their best interest. Ohio NeighborWorks organizations can act as a broker between the individual and the bank, empowering residents to continue making payments and avoid foreclosure.”

 

The initiative will borrow from a proven formula first developed by a NeighborWorks® organization in Illinois –Neighborhood Housing Services (NHS) of Chicago. Working with the city of Chicago, NHS of Chicago prevented 650 foreclosures in the past 18 months through innovative outreach and counseling efforts. Through Chicago’s Home Ownership Preservation Initiative, homeowners facing foreclosures can call a special “311 hotline” to be linked to a representative from a nonprofit credit counseling agency. The counseling agencies in turn work with area lenders to workout payment schedules that avert foreclosure.

 

The lessons from the Ohio and Chicago examples will be featured in the NeighborWorks Center for Foreclosure Solutions, which will act as a clearinghouse for best practices, research, and policies that have proven effective in reducing foreclosure rates. As the body of knowledge grows, the Center will deploy a series of clinics and training sessions for communities suffering from high foreclosure rates.  

 

“Our Ohio NeighborWorks organizations are leaders in their communities and have been  charged with figuring out how best to address this crisis,” continued Poston. “As those closest to the residents affected by foreclosure, they are in a prime position to know what’s needed and what works for their communities.”

 

About the NeighborWorks Network
The NeighborWorks network is a nationwide network of more than 235 community development organizations working in nearly 2,700 urban, suburban and rural communities across America. These organizations engage in revitalization strategies that strengthen communities and transform lives. NeighborWorks America provides financial support, technical assistance and training for the NeighborWorks network. In the last five years alone, NeighborWorks organizations have generated more than $8.5 billion in reinvestment and helped more than 500,000 families of modest means purchase or improve their homes or secure safe, decent rental or mutual housing.

 

The ten participating organizations in Ohio are: Columbus Housing Partnership; East Akron Neighborhood Development Corporation; Neighborhood Conservation Services of Barberton, Inc.; Home Ownership Center of Greater Cincinnati, Inc.; Neighborhood Housing Services of Cleveland; Columbus Housing Partnership, Inc.; St. Mary Development Corporation and HomeOwnership Center; Neighborhood Housing Services of Toledo, Inc.; Neighborhood Housing Services of Hamilton, Inc.; Neighborhood Development Services; and, Neighborhood Housing Partnership of Greater Springfield, Inc.