Homeownership dream becomes nightmare for many in foreclosure crisis

By Mark Pattison, Catholic News Service

WASHINGTON (CNS)—Owning one’s own home—part and parcel of the American dream—is turning into a nightmare for a growing number of American families.

The number of houses in foreclosure jumped 79.2 percent from 2006 to 2007, according to Realty Trac, an online seller of foreclosed properties. The 2008 figures aren’t available yet, but they are expected to be worse, given the current economic crisis the nation is facing.
Detroit and Wayne County, Mich., was the area with the highest foreclosure rate last year, with 4.92 percent of all households living in properties facing foreclosure.

Close behind are Stockton, Calif., with 4.87 percent of all households facing foreclosure, and Las Vegas, at 4.29 percent. In fourth place is the Riverside-San Bernardino, Calif., area, at 3.83 percent, but it placed first with actual 102,506 foreclosure filings.

The next-worst metropolitan areas were, in descending order: Sacramento, Calif.; Cleveland; Bakersfield, Calif.; Miami; Denver; and Fort Lauderdale, Fla.

Topping the list of foreclosure rates for states is Nevada, where one in every 146 homes is in foreclosure. California is second, with one in every 204 homes in foreclosure, followed by Arizona (one in 224), Florida (one in 242), Colorado (one in 349), Maryland (one in 380), Georgia (one in 422), Ohio (one in 432), Michigan (one in 440) and Massachusetts (one in 539).

In Michigan the St. Ignatius Nonprofit Housing Corp., has been dedicated over the last 15 years to buying and rehabilitating vacant houses in its eastside Detroit neighborhood and selling them to low- and moderate-income families—often for less than the cost of the rehab. But it has seen its mission change over the past year.

The sole house it currently has on the market has had no takers for two years, and it was broken into, with all of the saleable fixtures stripped. When it is rehabbed again, it will be leased, according to the organization’s director, John Ballard.

The previous ready availability of grant money from foundations and government sources for building low-income housing is drying up because they, too, are feeling the pinch economically.
Based at Samaritan Center, a one-time Catholic hospital now hosting several service agencies, St. Ignatius is the only entity in the building with the word “housing” in its name, so when people come to the building looking for help to keep their homes, they’re directed St. Ignatius’ way — at the rate of about a dozen a week, Ballard said.

The nonprofit housing corporation has taken to hosting public forums on foreclosure; it has held two and each drew 60 people. Those who attended were not “the people facing foreclosure, but the family members and friends of people facing foreclosure,” Ballard said.

Because the reeling auto industry has had a domino effect on other sectors of the local economy, unemployment is up and housing prices are down.

The median price of a house in Detroit today is less than $10,000, Ballard said. He supplied Catholic News Service with maps from the Detroit Vacant Property Campaign which showed that, with the exception of some riverfront areas and downtown sections, virtually the rest of the 140-square-mile city is eligible for federal Neighborhood Stabilization Fund money, and has a “very high risk” of foreclosed homes being abandoned.

The sheriff of Genesee County, Mich., which includes Flint, borrowed a page from the playbook of the Cook County Sheriff’s Office in Illinois and imposed a moratorium on the evictions of tenants in rental property whose landlords had defaulted on their mortgages to address the issue of how renters are treated when their landlord faces foreclosure.

To show how booming the foreclosure business is, the foreclosure specialist with whom Genesee County contracts has 46 people working for him, according to Undersheriff Jim Gage.
Some of those who handle evictions were throwing “these people out on the street before the ink was dry” on the eviction notice, Gage said. “They would pull in a dumpster and unload the guy’s house and leave, and the guy would come home from work and find his house empty,” hence the moratorium.

Gage said the county’s specialist “gets the court order and he goes to the home where the renter is or the landlord, whomever. ... He gets somebody to come to the door — usually they know when an eviction’s coming. (He says,) ‘Why don’t you get some friends and neighbors to help you move your stuff, and I’ll be back in a week.’ Nine out of ten times (when he returns) they’re gone. End of story.”

Asked if anyone had violated the moratorium, Gage replied, “We have some suspects; we’ll put it that way.”

In Cleveland, Cathy Groenstein, who works for the East Side Organizing Project, said her organization has been able to assist 85 percent of homeowners there who come looking for help, usually by working with lenders to modify mortgage terms.

The project receives funds from the Catholic Campaign for Human Development, the U.S. bishops’ domestic anti-poverty program.

Statistics for 2006-07 show that three of the four biggest percentage jumps in foreclosure filings were in or near Washington.

The Montgomery County, Md., suburb of Washington was 70th overall among U.S. metropolitan areas but registered a whopping 1,244 percent jump in filings, tops in the nation. The District of Columbia and its Virginia suburbs of Alexandria and Arlington placed 41st among metropolitan areas, but reported a 574 percent jump in filings, third in the country. And the Baltimore area, 66th in the U.S. in foreclosure rates in 2007, recorded a 544 percent hike in filings.

It got so bad in one Maryland parish that the pastor issued a letter in early October directing parishioners to sources to help them prevent foreclosure.

“Today, I read that in our neighborhood of Oakview alone, seven houses have gone into foreclosure in the past few months, another eight (were) condemned, bringing home how much the current economic crisis is affecting our parish,” wrote Father Michael Johnson, pastor of St. Camillus Parish in Silver Spring, Md., next door to Washington.

“I know that when people are having trouble with their mortgage and are worried about losing their home, sometimes they panic. And sometimes in their panic, they unwisely sign things they don’t understand and/or they do nothing and miss opportunities to better the situation,” he said, pointing to a Maryland Department of Housing and Community Development network to help homeowners stave off foreclosure.

In an Oct. 21 telephone interview with CNS, Father Johnson said he was prompted to write the letter because of “the amount of people that came in and had no clue what to do. I had a woman (come in) and she basically said, ‘I’m dealing with this situation and I don’t know where to turn.’ Another person was paying thousands of dollars to somebody to do something that the state was ready to do for free.”

The foreclosure crisis was just beginning to manifest itself a year ago, Father Johnson said. It can also be seen, he added, “in the amount of folks who come to the door for food. It has grown steadily over the past year. Most of those folks live in apartments, but not all. Some of the folks we’re helping, they’re trying to make the payments, trying to keep the electric on.”

Father Johnson said, “I think for most people the biggest thing is fear of the unknown,” adding that “a number of people have thanked me” for writing the letter.