Today's guest blog is by Marcelline White, Executive Director of the Maryland Consumer Rights Coalition (MCRC).
Good News:
Baltimore City is getting $10 million in housing aid from the National Mortgage
Settlement.
Bad News:
Under the city’s current plans, none of that money will be used to help city
families at risk of foreclosure save their homes.
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That’s why the
Maryland Consumer Rights Coalition (MCRC) on Aug. 1 wrote City HousingCommissioner Paul Graziano to ask the city to change its plans and to include
direct aid to families facing foreclosure in its plans for spending settlement funds.
Twelve other Maryland fair housing and social justice groups endorsed that
letter.
Baltimore has
been hit hard by the foreclosure crisis. Since 2008, city families have
received 89,903 Notices of Intent (NOI) to foreclose on their homes. In 2013
alone, foreclosure filings in Baltimore to date (and the third quarter is not
complete) already total 2,533, which means the annual total for this year is
likely to exceed the 2012 total of 2,793 foreclosures.
With so many
families in trouble, it is very disappointing that the $10 million plan
submitted by the city, and approved by the state Attorney General’s Office, for use of settlement funds does little to
address the plight of struggling families in danger of losing their homes. It
does not include funding for emergency assistance for homeowners, for
forbearances for families struggling to keep up with their mortgages, or to
defray the costs to homeowners to refinance their mortgages.
The city’s current
proposal focuses on razing and redeveloping more than of 550 vacant buildings
in the city and sets aside $750,000 for incentive payments for those who purchase
rehabilitated homes or purchase and rehabilitate homes in neighborhoods that
are part of the city’s “Vacants to Value initiative.”
No doubt
there is a real need to remove dangerous, dilapidated structures throughout the
city and to spur new development. But the terms of the settlement allow funds
to be spent on foreclosure prevention and foreclosure remediation efforts. The
city’s plan focuses instead on helping new homebuyers and promoting
redevelopment.
We’d like to
see the city find creative ways to use the settlement money to help families stay
in their homes and create new housing opportunities for homeless families. The
city could, for example:
• Launch an Emergency Mortgage
Assistance Fund --
modeled on an expired Maryland program, an EMAF would assist homeowners who
have lost their jobs, suffered a drop in income, or are struggling with medical
problems. Under such a program, qualified borrowers who are 3-to-12 months
behind on their mortgages could receive a loan for as much as $50,000 to cover
arrearages and pay for up to two years of future mortgage payments.
• Establish a
nonprofit community banking program -- modeled after the Boston Community Capital’s Stabilizing Urban
Neighborhoods (SUNS) Initiative, such a program would purchase owner-occupied
homes facing foreclosure at current market value and sell the homes back to
their former homeowners with a new mortgage.
• Acquire and
develop one permanent supportive housing project for homeless families and
individuals -- in Baltimore City’s 10-year Plan to End Homelessness,
stakeholders agreed to develop three sites for families. A portion of the
city’s settlement funds could be used to pilot this initiative.
We’re also
deeply concerned about the level of engagement the communities targeted for demolition
have had in the planning process. This engagement must go beyond a single
community meeting to ensure that residents understand the health and safety
protocols required for demolition activities and know whom to contact if
protocols are not being followed.
Residents of
the communities targeted for demolition need to have the
opportunity to understand the timeline for demolition activities and to
participate fully in shaping the greening and redevelopment opportunities that
will follow.
