Moving Toward Foreclosure in Delaware?
A few months ago, I was composing a post on the new foreclosure program that brought together a number of non-profits and the Delaware courts for the purpose of avoiding foreclosures. Unfortunately, that post still sits in my “drafts” list due to my stupidity.
But today, I am bringing you some of the details of the program. The word needs to get out to the people that need help. So please pass this along to anyone that may be in danger of foreclosure. In Delaware, the number of foreclosures is expected to be triple the usual number (6,000 expected this year compared to 2,000 typically).
The best place to start is at the State Housing Authority’s Foreclosure Help website. From the website:
The new foreclosure mediation program creates a process by which homeowners are connected to housing counseling and provided an opportunity to participate in a mediation session prior to the Court entering a judgment of foreclosure. This program gives homeowners a great opportunity to work with housing counselors, their lender and a neutral mediator to reach a positive alternative agreement and avoid foreclosure.
Help is available in English and Spanish and at a variety of non-profits throughout the state. Services available include counseling with certified counselors, help from lawyers that specialize in mortgage mediation and even lenders that don’t want to be left holding on to properties that will go fallow.
The current issue is that the program is having trouble getting the word out. Let’s face it, this blog isn’t exactly the place that many people that are facing foreclosure come for advice. But many of our readers may know people struggling with the loss of a job, medical bills or underemployment. We can get to those people through our readers. Go to the site and print out the fliers and forms and give them to your friends that may be falling behind.
Tags: Foreclosure
Unfortunately, this weak version of a mediation program, as it currently exists, will have little impact on solving the foreclosure problems for families in Delaware. Unlike its highly successful counterpart in Philadelphia, key elements that would have made it successful were eliminated by the banking interests in the state. Key components of the Philadelphia’s model program include: a) its mandatory, as opposed to DE’s opt-in version; banks and Homeowners are expected to show up; b)there is a funded outreach component to weary and wary homeowners by trusted community groups, and c) the judge, Judge Annette Rizzo, is highly invested in its success. As a result, 70% of families who’s otherwise would have been foreclosed, end up with a loan modification and staying in their home. And with the cost to the community of every vacant home estimated by the Joint Economic Committee at $83,000/lost home, the impact has been huge in minimizing the crisis in Philly.
To see a full report on the Philly program: http://www.acorn.org/index.php?id=12439&tx_ttnews%5Btt_news%5D=22554&tx_ttnews%5BbackPid%5D=12384&cHash=ecc501552a
RC,
I assume that you are not familiar with the Delaware program. Once the borrower meets with the Housing Counselor to determine if the borrower financially qualifies for the program (eg the borrower must show that they can make monthly payments not to exceed 38% of monthly income and this can be satisfied by calculating a mortgage rate as low as 2% and/or extending the mortgage to a maximum of 40 years) then the mediation sessions are imposed (mandatory. The funded outreach is in place through public notice and requirements of the lender to send a flyer(approved by the court) to the homeowner. The heretofore unfunded outreach by community groups is being addressed with volunteers going door-to-door. Judge Vaughn is intensely invested in this process and once the notification process is expanded we certainly expect the same ratio of success as the Phila. plan.
While I appreciate your need to feel skeptical in this matter it is unfortunate that you do not seem to have enough information to prematurely justify a dismissal of the Delaware plan as either ineffective or flawed.
John Kowalko
I agree with John. Judge Vaughn is committed to this program and while there are some weaker points than offered in the Philadelphia program ($ for outreach and a 90 day window as opposed to our 15 day window), Delaware ACORN (which provided the seed meetings that developed this program) had offered to use their HUD funding to do the outreach as volunteers going door to door.
ACORN lost it’s HUD funding temporarily because of the knee-jerk vote in Congress that stripped federal funds from the group. Just a week or so ago the DOJ determined that any standing HUD contract with ACORN must be honored and today, ACORN’s internal review (linked by UI in a different post) has cleared the group of any systemic or serious wrong-doing.
Without the outreach, few people have utilized Delaware’s foreclosure mediation program and Liberal Geek is probably correct in assuming those in need of it won’t be reading Delaware Liberal.
OTHO, people in a position to do something about the lack of outreach do read this blog 🙂
John, I don’t mean to disparage the hard work thats been done by you and community leaders to create this state based Mediation program. We’re all on the same side and fighting an uphill battle against the banks that apparently to run this country. But the proof is in the numbers: how many families have come through the DE program to date, and how many modifications have been made? The benchmark is 75% success rate in Philly. Dozens of mediation programs around the country currently exist, but few actually save homes at anywhere near the rate of Philly because they lack at least one of the key pieces I mention above.
And Nancy: my understanding is that there never was a funding mechanism to pay for outreach in the DE Mediation program. Counting on the resources of an already strapped ACORN (not to mention the target of McCarthyite withhunt) and other non-profits dooms these programs to mediocrity and worse. Philadelphia kicked in both city and raised a pot of private money in recognition of the need for a paid door to door component. Its critical to success.
And FYI: the DOJ decision you refer to do did not start money flowing again to ACORN (contrary to what the right wing blogs all say); it simply allowed for any money in the pipeline that had been frozen to move. As far as I know, that does not impact or result in any federal money coming to ACORN since there actually was none frozen. Unfortunately, contracts or grants ACORN had, whether it be on foreclosure outreach or fire prevention, have all been terminated.
But again, please share the performance data to date on the DE mediation program and I may have to eat my words!
Not a lawyer, RC, but wasn’t the whole purpose of ACORN’a legal challenge to the feds that there were contracts which were improperly terminated? My layman’s interpretation of the DOJ opinion was that Congress improperly terminated binding contracts. I don’t know if money ‘started to flow again’.
ACORN was absolutely online to perform the DE outreach for ‘free’ because they knew that it was the only way to get people to the program. There was nothing wrong with depending on ACORN for that function. The problem remains that no one gave a crap enough to figure out what to do after ACORN had, for all intents and purposes, been blacklisted out of polite conversation and severely strapped for funds.
The WNJ editorial the other day made the same point that you are making. Someone in state or county leadership will have to bridge the gap and structure some outreach. Who but ACORN would go into the scary ghetto door to door, I ask you. Maybe a crew could be put together by the Hope Commission.
~~
I just came across Dick Durbin’s ascertion (and proof) that the GOP connived with Wall Street in the spring to block his home foreclosure Cramdown legislation. (Keeping people in their homes should be a priority, one would think unless you’re a freakin’ Republican).
The FDIC Chair, Sheila Bair, is promoting a decent program right now.
Nancy
I believe you’re conflating two different actions: the DOJ decision and the lawsuit brought by the Center for Constitutional Rights on behalf of ACORN, claiming that the actions taken by Congress was a bill of attainder. Again, the DOJ action just “unfroze” any money for work ACORN, or any related organizations like ACORN Housing, had already done. The CCR lawsuit targets the Defund ACORN Act, but the damage has already been done: any federal contracts going forward, including ACORN Housing’s subcontract with ACORN do do outreach to foreclosure victims, has been terminated.
And again, hats off to ACORN if they “volunteered” to do outreach work “for free” to troubled homeowners. But there is increasing proof that where foreclosure mediation programs succeed, there is a FUNDED outreach component. Where they fail, or under-perform, its a volunteer effort, or a phone and mail program that lacks the face to face, human touch of a funded, and professionally run, outreach program. If DE is serious about making the Mediation program work, it’ll have to ante up some resources. Hell, Jack Markell, or even Rep Kowalko could join with ACORN in asking the Delaware Community Foundation to come up with some funds, or any of the dozens of corporations in our state that have profited big time off the mess we’ve been left with. (Barclays, owner of HomEq, one of the larger servicers, or Bank of America or Citi comes immediately to mind). And given the cost of foreclosures to our state, the cost of a paid outreach program is peanuts in comparison.
e enough. My point about the Hope Commission is that they already have teams of people on the streets in the tough neighborhoods either doing outreach about anti-violence programs or one developed out of stimulus money to conduct a survey in these distressed neighborhoods.
I would say either fund ACORN to do it or –and as I suspect is the case that our pols are too chicken shit and spineless to reach out to our impeccable DE ACORN– go to the Hope Commission and fund a team out of their outreach staffers.
“Judge Annette Rizzo, is highly invested in its success”
“Judge Vaughn is intensely invested in this process”
once apon a time Judges were expected to be nuetral arbitors of the law.