Federal lawmakers came to Cleveland this week for a grim analysis of how foreclosures continue to devastate the region. The lawmakers — part of a domestic policy congressional subcommittee — listened to a panel of local officials who shared stories of ongoing attempts to alleviate disaster for homeowners and neighborhoods.
Rokakis’ bleak assessment is based on rising figures for 90-day loan payment delinquencies and pending foreclosures, locally and throughout Ohio. While much of the prior focus was on the problems created by sub-prime loans, the rise in unemployment means that more people with traditional loans are facing foreclosures and delinquencies. And more people are finding that their homes are worth less than the balance on the mortgage.
Rokakis’ says the federal Home Affordable Modification Program (HAMP) has failed in Ohio. The program to assist homeowners has serviced about 650,000 loans nationwide, but only a fraction of those loans have been permanently modified.
Michael Dudley, a Garfield Heights councilman, also bemoaned the loan program and begged lawmakers to intensify education efforts for homeowners who get lost in a sea of bureaucracy, misinformation and apathy. Dudley says banks have misled some of his residents, telling them they could delay loan payments while they waited for their loans to be modified — then continuing to charge interest and and tacking on penalties. “We need to get something that’s going to educate these people,” Dudley said.
While officials say loan counseling works, one Ohio group says even that outlet for troubled homeowners could soon be diminished. Mark Seifert, executive director for Empowering & Strengthening Ohio’s People (ESOP), said federal funding for foreclosure counseling in Ohio will be slashed in half.
"These cuts will severely cripple ESOP’s ability to continue to serve the thousands of people we serve each year,” Seifert said. He also criticized HAMP, saying that his group had helped with 400 cases of loan modification. To date: only one permanent loan modification.