PUBLIC ADVOCATE TARGETS ILLEGAL EVICTIONS

State of New Jersey
Department of the Public Advocate
240 W. State St.
Trenton, NJ 08625

Jon S. Corzine-Governor
Ronald K. Chen-Public Advocate
For Immediate Release: December 23, 2008

Contact:
Laurie Brewer/NJDPA
609-826-5054
609-417-0038

Ed Rogan - DOBI
609-292-5064


PRESS RELEASE

New Jersey Public Advocate, Commissioner of Banking and Insurance:Tenants in foreclosed properties have rights – cannot be evicted due to foreclosure under NJ law

NEWARK – New Jersey Public Advocate Ronald K. Chen and New Jersey Department of Banking and Insurance Commissioner Steven M. Goldman today said they are looking into complaints that tenants who live in foreclosed properties throughout the state are being illegally forced out of their homes.

Chen and Goldman also warned real estate licensees and attorneys involved in this process that they may be subject to disciplinary action affecting their professional licenses if they intentionally mislead tenants that they must move from their residence solely because the property is in foreclosure or foreclosed.

In some cases, tenants are offered “cash for keys” agreements, where they are given money to turn in their keys and move out, but the offer does not mention that they are also free to stay. In other cases, they are just told they have to get out.

“We have had reports that tenants are being informed by real estate agents, attorneys, and others acting on behalf of a lender that they must move because their building has been foreclosed upon. We have already reached out to several of these organizations and individuals to put them on notice that their actions are illegal,” said Chen.

In 1994, the New Jersey Supreme Court held that the New Jersey Anti-Eviction Act protects tenants even when the property where they live is in foreclosure or has been foreclosed.

“A bank that forecloses on a residential property covered by this act takes the property with the tenants still in it. And, after the bank resells the property, the new owner becomes a landlord to those tenants,” said Chen.

“Real Estate Licensees have a legal obligation to their clients that requires them to be honest, forthright and to avoid misleading statements in notices that they send to the public. We expect our licensees to fulfill these obligations.” said DOBI Commissioner Steven M. Goldman. “If licensees do not completely share all information, or knowingly mislead residential tenants, the NJ Real Estate Commission will impose sanctions for this unethical behavior.”

The New Jersey Real Estate Commission (REC), a division of the New Jersey Department of Banking and Insurance, enforces New Jersey real estate licensing laws. The Real Estate Commission will issue a bulletin to real estate licensees outlining their obligations to be completely forthright with tenants.

“The Real Estate Commission staff works every day to ensure our licensees act in a lawful and ethical manner.” said Robert Kinniebrew, Executive Director of the New Jersey Real Estate Commission. “Licensees are on notice – failure to fully disclose information will result in sanctions.”

Chen noted that tenants are often not aware that they have the right to stay in their apartment even if the building is in foreclosure.

“It is absolutely vital that tenants understand their rights,” said Chen. “Tenants should also know that they must continue to pay their rent on time or save their rent if they do not know who or where the landlord is.” Chen warned that tenants who fail to pay their rent risk being lawfully evicted.

Chen said that his department wants to hear from any tenants who have received notification that they must vacate their apartments due to a foreclosure.

“If you’re a renter, and you receive a notice saying you have to move out because of a foreclosure, please call us at 609-826-5070. We want to hear about these cases so that we can inform people of their rights and make appropriate referrals for help,” said Chen.

Chen said that Legal Services of New Jersey, New Jersey Citizen Action and the New Jersey Tenants Rights Organization, among others, brought the tenant eviction issue to his attention and that all three organizations have had interactions with people affected.

“Low-income tenants are particularly vulnerable to this type of unlawful pressure to move out, and are most at risk of homelessness if they do,” said Connie Pascale, Vice President and Assistant General Counsel for Legal Services of New Jersey. LSNJ and six regional Legal Services programs throughout the state can provide legal advice or representation to eligible low-income tenants threatened with illegal eviction due to foreclosure. Tenants can call the LSNJ hotline directly at 888-576-5529.

“Unfortunately, most tenants are not aware of their rights, and can easily be convinced that they must move by unscrupulous landlords, real estate agents, or attorneys,” said Matt Shapiro, Executive Director of the NJ Tenants Organization. “Sometimes, landlords undergoing foreclosure will take the law into their own hands and effectively lock the tenants out by shutting off vital services like heat, electricity, or water. Such self-help lockouts have been illegal for many years because of the NJTO, and the tenant can sue for damages. NJTO also fought for another law which made these lockouts and shutoffs an offense under the criminal code.”
"As Citizen Action continues to be inundated with homeowners who are facing foreclosure, we are discovering that renters who occupy some of these homes are unaware of their rights as tenants and are being pressured to move out. Public education and strict enforcement of the law is essential to preventing more people from losing their homes,” said Phyllis Salowe-Kaye
Executive Director of NJ Citizen Action.


“The foreclosure crisis has been devastating to our urban communities turning back the clock on decades of neighborhood revitalization and redevelopment in a matter of months, turning once well cared for homes into the blight that we see far too often,” said Gerard Haizel, Executive Director of Episcopal Community Development. “More often than not, the tenants that are being put out represent some of the most vulnerable residents of the community with the fewest options for alternative affordable housing, forcing them into substandard housing or shelters.”
The Association for Children of New Jersey recently completed focused research on this area in its Newark Kids County 2008 report and concluded that the foreclosure problem in some Newark neighborhoods is three times the state average and that families with children are heavily affected by this trend.
Chen said community-based organizations and municipalities, through the efforts of groups like the Newark/Essex Foreclosure Taskforce, are already doing a lot of important work in this area and are critical in getting the word out to tenants, gathering information about the problem, and identifying solutions. The Department of the Public Advocate is hoping to work with these groups as well as other state agencies in order to identify a multi-faceted response to protect the rights of tenants.

The Department of the Public Advocate is also working with the state Board of Public Utilities to assist tenants whose utilities are shut off when a landlord who has defaulted on the mortgage also stops paying the utility bills. Tenants in this situation should call the Department of the Public Advocate for a referral to the Board of Public Utilities.

Enacted in 1974, the New Jersey Anti-Eviction Act protects residential tenants from losing their homes through no fault of their own. The Act applies whether or not the tenant has a written lease. The Act does not apply to tenants of owner-occupied homes with two or fewer rental units; units set aside for developmentally disabled members of the owner’s immediate family; and hotels, motels and guest houses.

In general, the law protects tenants against eviction from their homes as long as they pay the rent, respect the peace and quiet of their neighbors, avoid willful or grossly negligent damage to the property, and obey rules they have agreed to in writing.

The Department of the Public Advocate will distribute tenants’ rights brochures throughout the state as part of its campaign to raise public awareness of this issue, said Chen.
###

Walk-Around Update-Not Deterred

Volunteer Now!

As is often the case during this time of year the weather can be a challenge to anything taking place outdoors.

This week we were only able to get in the first of the three Walk Arounds planned. The other two will be new dates for the two postponed events will be posted as soon as possible.

The event that did take place, however, was a definite success thanks to the efforts of our partners at New Community Corporation, who was the lead agency for this Walk Around.

The Hand of Fate

While doing outreach on a particularly hard hit block in the northern part of the West Side Park neighborhood, the hand of fate lead us to brought us to the door of a single mother and her six year old daughter, who live on social security disability and a small monthly child support payment, that were less than a day from moving out of their home of two years and moving into a homeless shelter.

This family has been renting their small but well kept single family home for two years, always paying their rent on time. So why the move to a shelter? Because the landlord had lost the home to the bank in a foreclosure and the real estate broker was pressuring to move out of the house, trying to circumvent her rights by offering them money to leave, threatening tenants court and eviction if they didn’t leave. And to increase the pressure, every day that they didn’t leave, they decreased the amount that they would pay. When asked if they could stay through Christmas because her daughter had spent the last two Christmases there, they were told if they did then they would get no money. And if that wasn’t enough, they sent PSE&G to turn off the electric and gas.

So in order to get an $800 payment in hopes of using to try and get another place to rent, they were going to abandon their home for a homeless shelter.

This Walk Around was originally scheduled for Wednesday, but because of a scheduling conflict it was changed to Tuesday. Only because of a light on inside that caught the eye of the canvassers of NCC did they ring the bell as this property wasn’t on our list of homes in jeopardy. If we had come on Wednesday or that light hadn’t been on this family would now be in a shelter. And now we are working with this family so that they know their right as tenants as well as connecting them social services to help them moving forward.

A Special Thank You New Community for helping keep the light of hope burning!

NEXT EVENT:
SOUTHERN IRONBOUND: TUESDAY DECEMBER 16-10AM TO 1PM

Contact Don Baldyga @ Episcopal Community Development for more information
973-430-9985 or don@ecdonline.org

Walk-Around Update-A Great Start!!! Volunteer Now!!!

This past week the Newark/Essex Foreclosure Task Force began its Community Outreach and Vacant Property Survey Walk-Arounds.

This program has started off as an unconditional success!!!

The first two events were held on December 3rd and 4th and were lead by ACORN and La Casa de Don Pedro respectively. On those chilly days, not only were many residents engaged, much information distributed and many homes surveyed, but much was learned on how to make future Walk-Arounds even more productive.

A special thanks to ACORN and La Casa!!!

There are many people who, if not for their work, dedication and compassion this program would not even exist. To them we owe our undying gratitude. So thanks to Stephanie Greenwood of the, Department of Economic and Housing Development. City of Newark and all of those from the Bloustein School of Planning and Public Policy, Rutgers University who conceived this program and keep it going.

But this is just the beginning.

On this day, December 7, 2008 we remember the events of Pearl Harbor so many years ago. An event the, like this current foreclosure crisis, that might have been avoided if we as a people had not become complacent, ignoring the dark clouds of danger brewing on the horizon.

So let us not forget those that perservered to bring victory from the defeat of that infamous day, December 7, 1941, and let their courage be an example to us.

Let us remember the words of a young senator as he prepared to enter the highest office in the land:

“And so, my fellow Americans: ask not what your country can do for you—ask what you can do for your country.
My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man.
Finally, whether you are citizens of America or citizens of the world, ask of us the same high standards of strength and sacrifice which we ask of you. With a good conscience our only sure reward, with history the final judge of our deeds, let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God's work must truly be our own.”
John Fitzgerald Kennedy-January 20, 1961

Newark/Essex Foreclosure Task Force
Community Outreach and Vacant Property Survey Dates
December 2008/January 2009 (Updated 12/6/08)

For more information or to participate, please contact:
Don Baldyga, Director of Real Estate Development, Episcopal Community Development, Inc., 31
Mulberry Street, Newark , 973-430-9985 don@ecdonline.org

Upcoming Events:

December 9 West Side Park (NCC)
Time: 1-4
Streets: 15th Street to 18th Street, South Orange Avenue to 16th Avenue

December 11 Lower Broadway (LA CASA)
Time: 10-1
Streets: Stone, Cutler, Garside, Mt. Prospect , Clifton between Victoria and 3rd

December 12 West Side Park (TRI-CITY PEOPLES CORPORATION)
Time: 10-1
Streets: Springfield Avenue to 18th Avenue , 18th Street to 21st Street
Blocks: 354, 355, 356, 357, 358, 364, 366, 367, 368

December 16 Ironbound (Ironbound Community Corporation)
Time: 10-1
Streets: TBD

January (Date TBD) Fairmount (Greater Newark Housing Partnership)
Time: 10-1
Streets: South Orange Avenue to Central Avenue, 9th Street to 12th Street

VOLUNTEERS NEEDED

Essex Newark Foreclosure Task Force
Community Outreach and Vacant Property
Survey Dates-December 2008

Through a series of targeted outreach events the Task Force intends to:

· Reach all residents (tenants and homeowners) at risk of foreclosure-related problems in a particular target area by blanketing the community with information and assistance using volunteers from the sponsoring agency, other local organizations and anyone else who will volunteer
· Obtain detailed property information on foreclosure and/or abandoned homes to ascertain the physical effect of the foreclosure crisis on the structure of the community.

Below is the current schedule of events.

WE CAN ALWAYS USE MORE HELP!!! VOLUNTEER TODAY!!!

For more information or to participate, please contact:
Don Baldyga, Director of Real Estate Development, Episcopal Community Development, Inc., 31 Mulberry Street, Newark, 973-430-9985 don@ecdonline.org

December 3 Lower Roseville (ACORN) Time: 1-3
Streets: 9th Street to 13th Street between Park Avenue and 7th Avenue
Time permitting Park Ave to 4th Ave – 9th, 11th, and 12th Streets

December 4 Lower Broadway (LA CASA) Time: 10-1
Streets: Lake, Highland, Parker, and Ridge between 2nd and Park Ave
Summer between Crane and Taylor

December 9 West Side Park (NCC)Time: 10-1
Streets: 15th Street to 18th Street, South Orange Avenue to 16th Avenue

December 11 Lower Broadway (LA CASA)Time: 10-1
Streets: Stone, Cutler, Garside, Mt. Prospect, Clifton between Victoria and 3rd

December 12 West Side Park (TRI-CITY PEOPLES CORPORATION)
Time: 10-1-Streets: Springfield Avenue to 18th Avenue, 18th Street to 21st Street

December 16 Fairmount (Greater Newark Housing Partnership)
Time: 10-1-Streets: South Orange Avenue to Central Avenue, 9th Street to 12th Street

BITTER SWEET

Today at the November 2008 meeting of the Newark/Essex Foreclosure Task Force will mark a year since the initial meeting.

This is a Bitter Sweet moment.

The Sweet

In comparison to the many Task Forces and Committees that I have sat on over the years, this one ranks as the most productive by a wide margin. It has produced invaluable insight into the inner workings of the crisis. It has fostered inter-agency cooperation on an scale that would not have been thought possible, at least by an old cynic like me, only a year ago. New alliances have been forged that will continue to help the people we serve long after this crisis is past. And, most importantly, real and tangable results in helping people go trouble have been realized as a direct result me the task forces efforts.

On a personal note, friendships have been made that I hope will last a lifetime.

The Bitter
This meeting is not a celebration of the end of the crisis. Maybe not even the beginning me the end, but the end of the beginning.

We The People

Over the last few weeks I have been cautious on my writing as I don't want this site to be a political battleground. The candidates for President have created enough drama as it is. So what is going to follow is not statement of a partisan nature, but more of a comment of the state of the State.

To put my thoughts into historical context, the Founding Fathers stated what the government was to be and I could never say it more eloquently:

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

On a day to day basis, my day job (so to speak) resolves around some of the promoting the general welfare, helping provide affordable decent housing for all. One of the basic tenants of life, food, clothing and shelter. In these modern times, one new basic component of the general welfare is health care.

On a daily basis I see how We The People have slipped in our responsibility of promoting that general welfare. I am not just talking about the Government or a political party, but all of us. I am lucky, however, to have come to meet a group who understand the responsibilities of We The People.

Double Trouble

The impetus for this post is the story of a family that came to my attention about a week ago. A week ago this family was living in their long time home, like all the middle class"Joe the Plumbers". Last night, if night for the herculean actions of a few dedicated people, this family was looking at spending the night in their car.

This family was falied not only by a financial system that took their home without leaving them a clear plan for their safety, but by a health care system that drained them of any financial safety net that they had. The father lost his job and his health insurance, leaving him with the choice of paying the mortgage or for the medication that his wife and his son take for cronic conditions they have. He chose their health, costing him his home.

I would say that We The People failed to provide for the general welfare of this family, thus denying them the Blessing of Liberty that our Founding Fathers spoke so eloqunetly of 221 years ago.

THUMBS DOWN ON THUMBS DOWN

The following is a Letter to the Editor to the "AIM West Milford" in response to a "Thumbs Down" about a neighbor that lost their house two foreclosure. I'm posting my letter here as AIM has not yet published it. What do you think?

THUMBS DOWN ON FORECLOSURE

While reading the September 25th issue of AIM West Milford I was dismayed by a Thumbs Down about neighbors who had lost their home to the bank and had left “useless garbage” behind.

My dismay is not with the comment itself but the fact that it seems that we as a society has become desensitized to the tragedy that foreclosure and the loss of one’s home is. We have come to think in terms of Wall Street and Main Street, but we have lost what is means in human terms.

At the end of the foreclosure process, I can assure you that the families that are being displaced are not functioning logically. Losing your home to foreclosure is one of the most traumatic events one can face, only behind the death or serious illness of a loved one. The feeling of grief and guilt and shame can be overwhelming to people, so overwhelming that mental health professionals have likened the condition to Post Traumatic Stress Syndrome.

In my professional life, working for a not for profit community development organization, I have the opportunity to work with people in jeopardy of losing their homes as well as dealing with the vacant homes left behind. Much of my work is in the urban centers of northern New Jersey were the concentration of foreclosure is staging. But whether in Newark or West Milford, the personal trauma of losing your home is no less devastating.

If you want to ask why things aren’t cleaned up then let’s ask where the new owner, the bank, is. They are forcing families out of their homes without a clear plan on how to maintain the properties after they own them. Then they let them deteriorate only to sell them for less than the previous owners owed.

So let us remember that foreclosure isn’t about a house, it’s about a home and the family that lives in it. Garbage can be cleaned up, but can the lives of that family be cleaned up as easily, if ever? People have literally turned to suicide rather than face foreclosure.

Dealing with this day in and day out, I know that there but for the grace of god go I.

ONE AT A TIME

Episcopal Community Development (ECD) and a group of concerned residents of Seymour Avenue in Newark have joined forces to turn the tide on the devastation being caused by the ongoing foreclosure crisis.

Starting Tuesday September 30, at last count 13 residents from the northern most block of Seymour Avenue will begin ECD’s seven week home buyer training program so that they can begin the process of buying and rehabilitating foreclosed and abandoned homes on their block. Thus turning tenants into home owners while, in the process, reclaiming their neighborhood.

In an effort to ensure that these residents don’t fall into the hands of new predators, Homebuyer Counseling Program will provide them with education about home purchase and individual counseling to help each family address their personal needs and goals. In classes, students will learn about the basics of budgeting, using credit wisely, obtaining a good mortgage, working with various real estate professionals and being a landlord. They will put this information to use in individual counseling as they develop their own budget, build their credit, and assess how much house they can afford.

But the counseling doesn’t end there. Each new homebuyer will have the opportunity to continue to work with a counselor throughout the purchase process, as well as post-purchase to assure the sustainability of homeownership.

This is nothing, if not a herculean task as this block represents one of the worst hit block in the City. Of the 36 houses on the block, 18 of them are in some stage of foreclosure. As these are mostly two and three family homes, this could end up displacing upwards of 50 families.

Seymour Avenue is located in the heart of the Upper Clinton Hill section of Newark’s South Ward, an area that has seen a disproportionate amount of foreclosures. This can be traced back to the especially high percentage of high cost/sub-prime mortgages that were originated in the last several years in this community.

As a Not For Profit Community Development Corporation with strong roots in urban northern New Jersey, ECD is particularly committed to the residents of the historically underserved Upper Clinton Hill Community. ECD was just awarded a $730,000 grant from the Wachovia Regional Foundation to fund the five year implementation of the Upper Clinton Hill Neighborhood Plan. ECD has been working in conjunction with a number community groups, the office of South Ward Councilman Oscar James and the Mayor’s office through its South Ward Liaison.

ECD believes in a holistic approach to community revitalization; offer planning, housing development, counseling and community organizing services as is evidenced by the work being provided to the residents of Seymour Avenue.

ECD also know that only with the participation of the community can any plan succeed.

For more information about the Seymour Avenue program, ECD or how other communities can start their own program, contact ECD at 973-430-9986 or visit us at ecdonline.org.

Newark Group Wins $730,000 Grant

by Chanta L. Jackson/The Star-Ledger
Wednesday September 17, 2008, 10:29 AM
Newark's Upper Clinton Hill community is the recipient of a $730,000 grant from Episcopal Community Development, Inc. and Wachovia Regional Foundation. The grant will support four initiatives -- the revitalization of the Clinton Avenue commercial corridor through Upper Clinton Hill; the development of affordable housing within the neighborhood; the establishment of a community resource center; and the creation of a "community spirit" initiative specially targeted to neighborhood youth.
"This grant will be crucial to allowing us to have the positive impact that we are seeking for Upper Clinton Hill," said Gerard Haizel, Executive Director of ECD. "Like the ripples on a pond, these initiatives will permeate throughout the entire neighborhood and bring about tangible change, ultimately improving the quality of life for residents."
The neighborhood includes an 85-block area that is bordered by Avon Avenue, Bergen Street, Route 78 and Irvington.
ECD was established in 1991 by the Episcopal Diocese of Newark to address issues associated with economic and social justice through the development of affordable housing and comprehensive community development in impoverished neighborhoods, and by empowering residents to improve their lives.
For additional information on the foundation, visit www.wachovia.com/regionalfoundation.

And the Band Played On: The Foreclosure Crisis

Yesterday I had the opportunity to attend a forum at the Ford Foundation on the foreclosure crisis and its effects disproportionate negative effect on minorities. As this discussion was going on, Wall Street continued with its worst crisis since the Great Depression, brought on by the same flawed lending practices that put minority and other low and moderate income homeowners in harm’s way.

Ironically, in this last week I had the chance to get an advanced look a paper written by a friend that has been researching the sub-prime mortgage crisis. The irony is that she has been researching this for years and some of the references in the paper go pack years before that. When I mentioned to her that I was surprised how far back some of the data goes, she sent me references to other research that goes back as far as 2000.

As I thought about how far back researchers so this crisis coming, in my mind’s eye I saw the actor Matthew Modine playing the young AIDS researcher in the made for cable movie “And the Band Played On”. This was the movie adaptation of “And the Band Played On: Politics, People, and the AIDS Epidemic” the non-fiction best seller by Randy Shilts about the discovery and spread of AIDS and the government’s indifference early on that is still affecting the world today. The title of the book is a reference to the story about the dance band in the first-class lounge of the RMS Titanic, which kept playing as the ship sank, thereby alluding to the multiple agencies and communities who neglected to prioritize a swift medical response to the crisis.

How could this data gone unnoticed? As the real estate market continued to heat up, and we saw double digit increases in property values, few in positions authority saw it necessary to change policy as properties in foreclosure could be sold out of trouble. But when the prices of real estate stagnated, the whole pyramid came tumbling down.

But just like the passengers of the Titanic drowned, FAMILIES are drowning in debt and losing their HOMES.

When will we, as a society, learn?

And the Band Played On

Foreclosure’s Band of Brothers (and Sisters)

When Stephen E. Ambrose named his book on the history of the men of the remarkable Easy Company, 506th Regiment of the 101st Airborne Division during WWII he chose Shakespeare as his inspiration.

In Shakespeare’s Henry V, the King speaks before the Battle of Agincourt, facing what seemed like insurmountable odds, facing a superior French army. Yet Henry’s army went on to victory, empowered by his words of encouragement, “…We few, we happy few, we band of brothers; For he to-day that sheds his blood with me shall be my brother…”

As Ambrose’s Band of Brothers were men assembled from all over the United States, to join in the noble cause of literally saving the world, so the cause of saving our inner cities from the ravages of foreclosure has brought together as diverse a group, literally from around the world.
If there is anything positive that I will take away from the fight to save the communities in Newark/Urban Essex, it will be the chance to stand shoulder to shoulder with some of the best and brightest that our society has to offer. Like the men of Easy Company, today’s Band of Brothers and Sisters has chosen the noble cause, the hard fight, over the pursuit of material gain and self grandeur.

This Band is made up of residents of Newark and Irvington to fellows from Germany and Poland and San Francisco. They come from City Halls, from the Ivy League to Ivy Hill. They are a kaleidoscope of color, religion, and national origin. Some are young and some are old with every age every age in between.

There are educators, planners, administrators, realtors, builders, lawyers, social workers, students, pastors, consultants and dare I say even some community organizers.
The battle is joined and, as Henry’s Army in 1414 and Easy Company in 1944 did, we will prevail. I am proud to be part of this Band of Brothers and Sisters; having joined with people I can call friends!

As Shakespeare’s Henry said:

” This story shall the good man teach his son; And Crispin Crispian shall ne'er go by, From this day to the ending of the world, But we in it shall be remembered- We few, we happy few, we band of brothers; For he to-day that sheds his blood with me Shall be my brother; be he ne'er so vile, This day shall gentle his condition; And gentlemen in England now-a-bed Shall think themselves accurs'd they were not here, And hold their manhoods cheap whiles any speaks That fought with us upon Saint Crispin's day.”

The Many Faces of Foreclsoure

Back in April, the Newark/Urban Essex Foreclosure Task Force had a area wide outreach campaign to get the word out about resources available home owners in jeopardy of losing their homes to foreclosure. At the end of the event, participants from all over Newark and the surrounding urban communities converged on a house the ECD had recently acquired out of foreclosure.

I thought it would be interesting if the former owner would come and give her story as to how the home had fallen into such disrepair and why it had ended up with a foreclosure filing. She responded that she didn't think her story was representative of the normal foreclosure, but she did share her story. Here it is, in her own words:

“I appreciate you reaching out to me. However, my situation was altogether different. I purchased this property from a family member who was unable to move out for over a year. During this time, I suffered unexpected cost due to their usage. Then once vacated, I would spend money to start repairs only to have local break in and steal items installed. Cabinet, pipes, sheet rock and flooring. They then began to steal fixtures from the kitchen and bathrooms.

Subsequently, it became impossible for me to sink anymore money into this property while trying to maintain my primary resident and another income property in the city. The property was put on the market and a cash buyer was secured. However, that buyer kept requesting to push the purchase date back so many times that we later found they were hoping that I would not be able to afford the payments any longer, thus ending in foreclosure so they could get a possible short sale.

When this was discovered I reached out to Mary Ann (her realtor) to secure a real buyer for the property.”

As time has gone on, there is no one "usual" story. Only more damage to the fiber of our communities.

Cummunity Agencies Join to Preserve Neighborhoods

Yesterday, in the face of the onslaught being caused by the on going sub-prime mortgage crisis and resultant foreclosures, the Newark/Urban Essex Task Force kicked off its Neighborhood Preservation Campaign (NPC) to preserve neighborhoods and protect residents in jeopardy of being displaced from their homes. This includes the tenants, who are often most at risk in a foreclosure.

NPC core precept is the development of community based Leadership Teams that would function in specific neighborhoods, or in an area as small as a block, to stabilize this area. the Teams will be supported by Lead Agencies, larger Community Development Corporations (CDC), who will provide training, data and logistical support.

If you are interested more information about being a Lead Agency or developing a Leadership Team send an e mail to don@ecdonline.org.

Only with community engagement can we stem the tide of this crisis.

A Tentant's Story

This is the true story of a rental property in Newark, a nice house that had two nice tenants. Today it's vacant, in need of a total rehabilitation and stands as a monument to the subprime mortgage crisis.

In 2001, this house was an abandoned two-family that was foreclosed, and ultimately title was transferred from the lender to the US Department of Housing And Urban Development (HUD). (We can assume this happened because the foreclosed mortgage was originally bought through a government-backed program with the Federal Housing Administration).

HUD sold the property to an individual that rehabilitated it. That owner did a good job, making this house that was built in the early 1950's into a modern, comfortable affordable rental property, The house traded hands two more times, with the price increasing until the last owner paid $300,000. That last owner financed the purchase through a subprime mortgage, obtained through a mortgage broker. Ultimately the owner could not afford the mortgage and the property was foreclosed by the lender.

In November of 2007, I met the tenants of this property in the Water and Sewer Department office in Newark City Hall. It turned out that these two women were single moms who received Section 8 rental assistance. They were paying their portion of their rent to the water department so that the water would not be turned off. After the foreclosure, the new owners had not taken any steps to manage the property.

After talking with these ladies, I learned that they liked living in the house, like being neighbors and the one woman would be interested in buying the building. There are special programs that allow Section 8 vouchers to be used toward the purchase of a home.

I wrote to the attorney that handled the foreclosure for the lender to suggest the following:

· We would interview this woman to see if she would qualify for a mortgage and how much she could afford to pay for the property;
· We would run her through our first time home buyer and landlord courses (we are a HUD certified housing counseling agency); and
· We would work with the buyer from contract to loan commitment to closing.
At that time, we estimated that she could comfortably afford a purchase price of $250,000. I never received any response on our proposal.

The tenants ultimately vacated the building, which was left improperly secured. Vandals broke in to the building, and it now needs a complete rehabilitation. The property was listed for approximately $89,000. It went under contract at no more than that amount. After the manager, broker and attorney get paid, the lender will be lucky to realize $80,000.
A loss of approximately $165,000 to the lender, not including the lost interest payments from the unnecessary six month delay. A loss of a secure home for two women who could have successfully transitioned to homeownership. A loss to the neighborhood of a stable, well-maintained property.

No happy ending here.

Friday Shorts

Mr & Mrs Lamar Davis End Their Foreclosure Threat

On August 4, 2008, long time Newark residents Mr. and Mrs. Davis met with a member of senior management of their lender, Franklin Credit Management, and were able to work out new terms for their mortgage that they will be able to afford, allowing them to remain in their home.

Pat Hawkins, ECD's Program Director of Homebuyer Services & Financial Education will be working with Mr. & Mrs. Davis to establish a budget to help them maintain rebuild their financial health.

ECD was first introduced to Mrs. Davis at a Foreclosure Prevention Program sponsored by the Newark/Urban Essex Foreclosure Task Force.

The full Davis story will appear here shortly.

CALL TO ACTION

During the week of of Septmebr 8, 2008, the Newark/Urban Essex Foreclosure TaskForce will be having Working Group Meetings to establish concrete action items to be completed over the next few weeks. For more information on the Task Force and how you can help, send your e mail to foreclosuretaskforce@yahoo.com. More Task Force information will be posted after the working group meetings.

The Housing Disasters of 2008: Flood, Fire and Foreclosure

The Housing Disasters of 2008: Flood, Fire and Foreclosure
By: Donald A. Baldyga, Jr.

As the Midwest contends with flood waters and wildfires rage across the west, another disaster is ravaging the families across the nation.
FORECLOSURE.
Just as surely as flood waters wash homes of their foundations and fire burns homes to the ground, foreclosure is razing homes all across the nation. In some placing the destruction is metaphoric while in others, like our inner cities, it is a physical reality.

How can foreclosures compare with floods and fires? Isn’t foreclosure a human-made issue while the others are natural phenomena? Didn’t the families losing their homes to foreclosure get themselves in trouble? The answer to these questions is yes and no.

All three of these disasters have both natural and human-generated components. While the rain causes the river to overflow its banks and flood homes, man-made structures cause water to flow away from its natural path. While lightning may cause the outbreak of fires, human beings building in areas that have been susceptible to wildfires for millennia take a natural event and turn it into a disaster. A family that to want to improve its standard of living runs afoul of the manmade changes in the fundamental principles of our economy, and that is what has brought these families to and ultimately over the precipice that is foreclosure.

The physical and emotional toll of foreclosure on a family and a community is just as severe as the toll of flood or fire. A home that has been ravaged by the theft of copper and other valuables or burned to the ground by careless squatters trying to keep warm is no less destroyed than if the damaged had been caused by other means. The emotional devastation to the family that loses its home is no less real than if the home had been lost in a flood or fire.

In many ways the loss of home through foreclosure is even more insidious. First, the disaster itself is invisible to the uninitiated. With foreclosure there is no rising water or smoke to tell others around you that trouble is coming to your house. With flood and fire there is no stigma attached to the impending loss of the home, there is no shame in the approaching disaster. If the fire is coming, you wouldn’t hesitate to ask your neighbor for a hose but when foreclosure is coming, do we ask for help? In fact, more than half of the families facing the disaster of foreclosure never ask for help and without the telltale signs even a concerned neighbor, friend or family member doesn’t know that help is needed.

When a so called “natural disaster” occurs, society rushes to the aid of those in jeopardy and then looks into what caused the disaster. Send in the National Guard. Mobilize the Red Cross and the Salvation Army. Get FEMA on the job. Appropriate billions overnight. But in the case of foreclosure, much of society has taken to pointing an accusing finger at those who are in peril and our government has been busy with weak “voluntary” mortgage market reforms, fixing blame and bailing the financial markets. But where is the National Guard, the Red Cross, the Salvation Army, FEMA?

Newark is an area that has been hit exceptionally hard by this disaster. After decades of languishing, Newark was finally on its way into the renaissance that so many had hoped for for so long. And now decades of toil are being decimated in a matter of months if not weeks. The empirical data around this onslaught is astonishing to say the least.

With a predominance of multifamily homes, every dwelling lost to foreclosure and the ensuing destruction represents, for the most part, the loss of two affordable housing units. Add to that an average family size of just over 3.5; each foreclosure is displacing approximately seven individuals.

During calendar year 2007 approximately 350 dwellings were sold at Sheriff Sales. This number does not take into account properties that were transferred through either a short sale or deed in lieu. For discussions purposes, I’ll assume the total number of dwellings lost to foreclosure for 2007 approximates 400, or 800 affordable housing units, or 2,800 residents permanently displaced. In 2008 we are anticipating significant increase in the number of foreclosure filings. I estimate for 2008 dwellings lost to foreclosure will exceed 500 additional homes in the City. That is another 3,500 residents permanently displaced. That means in the course of two years, over 2% of Newark’s population would have suffered from the trauma of losing their homes through the disaster of foreclosure.

Another symptom of the Foreclosure Disaster is the cost it is having on our already strained health care system. The emotional and psychological effects on the family members as they try to stave off a foreclosure can be overwhelming. Not only will the stress manifest itself in physical symptoms such as headaches and stomach pains, but also, more alarmingly, in increased anxiety and depression. People who have pre-existing mental health issue are even more susceptible to the stress of a foreclosure.

As the foreclosure disaster continues, the human toll associated with it will continue to rise. Children displaced from their schools will lose crucial educational stability and opportunity. Families may choose hunger over homelessness for months leading up to a foreclosure. Some will end up on the street or in the shelter systems. Some who can least deal with the stress depression and anxiety have tragically chosen suicide over dealing with the feelings of failure and embarrassment of losing the family home.

Finally, aside from the personal and social consequences of foreclosure, let’s look at some of the financial consequences. Properties lost to foreclosure will result in a significant loss in tax revenues. This loss will have to be made up somewhere, which means an increase on the remaining property owners. As houses are foreclosed and abandoned, there will be a significant decrease in the value of the rest of the homes in the affected community. It is estimated that a lone abandoned home can decrease the values of the houses on that block by an average of 15%. And as housing values continue to drop and the tax burden rises, more people will be in jeopardy of foreclosure.

I am not trying to minimize the loss of those who have lost their homes in the fires and floods that have ravaged parts of our nation. On the contrary, I want it understood that the devastation caused by foreclosure is as real and as painful as that caused by fire and flood. We should give those facing foreclosure the same chance that we give other Americans facing the loss of their home.

Welcome To ECD Housing Blog

Welcome to the first installment of the ECD Housing Blog.

This forum will be a place to discuss the issues that affect the development and preservation of affordable housing on urban northern New Jersey.

With the onset of the subprime mortgage crisis, we are seeing the neighborhoods that took decades to rebuild being devastated in months.

Back in June I wrote a piece that compared the foreclosure crisis to the natural disasters occurring across the country. With the recent publicity of Hurricane Gustav, I though it was time to post that as the beginning of this site.