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.