Losing your property? Experts offer tips
By AMANDA SMITH-TEUTSCH / Tribune ChronicleFact Box
To be eligible for HOPE for Homeowners through the FHA:
n The mortgage must have originated on or before January 1, 2008;
n Borrowers cannot afford their current loan;
n They must have made a minimum of six full payments on their existing first mortgage and did not intentionally miss mortgage payments;
n They do not own a second home;
n Their mortgage debt-to-income must be at least 31 percent;
n They did not knowingly or willfully provide false information to obtain the existing mortgage, and they have not been convicted of fraud in the last 10 years;
n They must follow FHA's long-standing and strict policy of fully documented income and employment.
n To participate, existing subordinate lenders must agree to release their outstanding mortgage liens.
Homeowners can determine if they are already eligible for mortgage assistance through FHASecure. They can obtain information through any of the following options:
1. Contact current lender
2. Contact a local, HUD-approved housing counseling agency at HUD.gov;
3. Contact the HOPE NOW Alliance at 1-888-995-HOPE; or
4. Call FHA at 1-800-CALL-FHA.
With more than 500 Trumbull properties are mired in foreclosure through the first six months of 2008 alone, 3,000 vacant properties in Warren and 8,000 in Youngstown, the number of home foreclosures and vacant properties locally are among the highest in the state of Ohio, leading local and federal government agencies to take two approaches to dealing with the problem.
Working to prevent foreclosures and keep people in their homes comes first. When that fails, money has been authorized, through the Neighborhood Stabilization Program, to tear down or rehabilitate vacant properties.
''If you have an abandoned property no one is taking care of, it can bring down the values of adjacent properties by 20 percent,'' said Andrea Lupton, president of the Warren Area Board of Realtors. She recommends people facing foreclosure stay in the home as long as possible. ''It's always better to have people in the houses than not,'' she said.
''We advocate, even if you're losing the property, stay in the home until the sheriff tells you to get out,'' she said. ''You may not be paying the mortgage, but you are paying utilities and keeping the property value up for the neighborhood.''
Consider giving written permission to neighbors, she said, to enter the property for basic upkeep, like mowing grass, if the house becomes abandoned, she said.
''For neighbors, it's worth the Five Bucks for gas to keep the outside maintained and looking nice," she said.
Local realtors have been referring those in danger of losing their homes to the Save The Dream and the Save Our Valley Homes task forces, she said.
The state has created the ''Save The Dream'' task force to prevent foreclosures, offering information on steps in the foreclosure process, links to resources that help with emergency payments in case of job loss or illness, and contacts for counseling on credit and money issues. That works in tandem with the Trumbull County Save Our Homes task force. The local program coordinated by the Trumbull County Planning Commission describes the foreclosure process in Trumbull County and provides lists of community agencies with funding available to help homeowners avoid foreclosure.
HOPE for Homeowners, administered through the Federal Housing Administration, allows eligible borrowers having difficulty paying their mortgage to refinance into FHA-insured mortgages they can afford.
For borrowers who refinance under HOPE for Homeowners, lenders will be required to ''write down'' the size of the mortgage to a maximum of 90 percent of the home's new appraised value.
Often, however, foreclosure leads to vacant homes. County records show 540 properties have become mired in foreclosure proceedings through the first six months of 2008 alone. Warren has an estimated 3,000 properties, according to Ian Beniston of the Mahoning Valley Organizing Collaborative. In Youngstown, census data shows more than 8,000 vacant properties.
''Youngstown has twice the number of vacant properties as Columbus,'' said Beniston. ''The problem is much worse here. I would say it is the worst in the state," he said.
Ohio received $160 million as part of the Neighborhood Stabilization Program, passed as part of the Housing and Economic Recovery Act of 2008, Beniston said. Every state, and some local communities, will receive money to prevent and deal with blight as part of the program.
According to the department of Housing and Urban Development, Youngstown has a foreclosure rate of 14.7 percent, the highest in the state, Beniston said. That means the $2.7 million the state set aside for the program is inadequate.
"We are hard hit by this," he said. "We want to make sure we get our fair share."
By comparison, Canton has a population of 80,000, the same roughly as Youngstown, he said. They have a lower rate of foreclosure, he said, but are receiving $3.7 million to the city. Stark County is in line for $4.2 million. Mahoning County has nothing allocated, he said.
''A fair share would be $16 million," Beniston said. ''That's just a starting point."
