Lafayette Neighborhood Housing Services (LNHS), in Lafayette, Indiana, created the Tippecanoe County Home Ownership Preservation Initiative in partnership with JPMorgan Chase Bank (formerly Bank One) to address the issue of increasing foreclosure rates in Tippecanoe County.

Founded in 1982, LNHS is a nonprofit partnership of lenders, city government, businesses, residents, and community organizations that works to renew pride in neighborhoods and provide decent, affordable housing for low- to moderate-income households. The agency strengthens neighborhoods and prevents deterioration by stabilizing and improving property values.
 
In 2003, LNHS began looking at ways to address the high foreclosure rates in its target area. At the time, Indiana had one of the highest foreclosure rates in the nation. In addition, LNHS had experienced a 300-percent increase in postpurchase referrals.
 
LNHS knew that a high rate of foreclosure could easily devastate the community and damage the homeownership gains the agency had made over the years. Furthermore, foreclosures hurt everyone involved: homeowners lose their homes and financial assets; mortgage insurers, loan services, and secondary markets lose money; and city governments are forced to maintain or demolish empty properties. Also, property values in the neighborhood may decline as homes sit empty.
 
To address the issue, LNHS and JPMorgan Chase formed the Tippecanoe County Home Ownership Preservation Initiative (HOPI) with representatives from the mortgage industry such as lenders, appraisers, and title companies as well as local nonprofits, neighborhood groups, and city officials. The first partnership meeting was held in September 2004. LNHS referred to a similar program at Neighborhood Housing Services of Chicago for guidance during program development.

Program Foundation.  HOPI partners found that, locally, the high rate of foreclosure was primarily due to delinquencies associated with subprime and predatory loans, most of which were unaffordable for the borrowers. In addition, many individuals and families had poor financial management skills and excessive debt loads. In spite of these findings, HOPI partners did not want to place blame but, rather, focus on solutions. Program partners decided to work together to preserve homeownership through counseling, loan workouts, and loss mitigation and develop a strategy for keeping foreclosed properties from becoming problematic.

HOPI Workshops.  To kick off the initiative, HOPI partners held a series of workshops. The first meeting was held in February 2005 and was attended by more than 100 members of the mortgage industry. At this one-day seminar, participants developed the goals and activities of the initiative.
 
The second meeting was for real estate agents. They were provided with information on the local foreclosure situation and were given the goals of the initiative. Realtors were provided with a “short sale” training clinic and given information on the purchase/rehabilitation loan options available through LNHS. More than 50 people came to this event.
 
The third workshop was aimed at neighborhood groups. With help from the Great Lakes District of NeighborWorks America, LNHS hosted Bruce Gottschall from Neighborhood Housing Services of Chicago at this event. Other panelists included police officers, lenders, and city code enforcement representatives. At this meeting, the potential impact of foreclosures was discussed in detail and a workshop was scheduled to address homeownership preservation strategies. About 80 community members attended.
 
At the fourth workshop, HOPI partners and neighborhood associations identified specific steps to protect neighborhoods from foreclosure. About 30 people came to this event.

Goals and Activities.  At the workshops, goals were identified for each entity involved. For potential homebuyers, partners decided to focus on increasing home purchase and financial management education. Homebuyer educators were asked to provide standard homeownership and financial responsibilities to potential buyers, and stress the importance of calling their lender right away in the case of a delinquency.
 
Lender partners were asked to identify effective foreclosure prevention strategies and created a list of “best practices” for overcoming the issue. Lenders were also asked to carefully match buyers with their loan products. Other goals included increased communication between servicers, borrowers and loss mitigation; more referrals made to homebuyer education; and closely monitoring the local foreclosure statistics.
 
The goals set for local government focused on identifying and addressing mortgage fraud. HOPI partners want legislators to regulate lending practices and require mortgage broker registration, plus develop a high-level task force to study the overall housing situation in the county. Partners also created more general objectives such as raising public awareness and fostering community partnerships.

Partnership Meetings.  HOPI partners meet once a month at LNHS to discuss program goals, strategies, trends and accomplishments. When planning a community workshop, the group meets more often.

Partner Recruitment.  Ongoing partner recruitment for HOPI is conducted by LNHS’s community outreach staff person, who offers information and on-site presentations regarding HOPI goals and activities.

Counseling Partnership.  To further strengthen the counseling activities through HOPI, LNHS began a partnership with the local Consumer Credit Counseling Services office. Under the proposed plan, a CCCS staff person will have an office at LNHS and offer credit and debt counseling as well as money management services. This will allow LNHS staff to fully focus on the housing aspects of foreclosure. The staff person will be paid by CCCS and the office space will be covered by LNHS.

Marketing.  Program marketing is covered by Leadership Lafayette, a local nonprofit organization that develops leaders through comprehensive classes on community involvement. Leadership Lafayette is creating a comprehensive marketing plan for HOPI in conjunction with Freddie Mac’s “Don’t Borrow Trouble” campaign. LNHS staff help with the plan, which includes press releases, billboard advertisements, and other strategies to raise awareness.

Program Costs.  The primary cost for LNHS is staffing. Three staff members, including the executive director, contribute between 10 and 15 percent of their time to HOPI activities. There are also minimal workshop expenses such as mailings, materials, speakers and refreshments, which are shared by HOPI partners. Each workshop cost less than $1,000. HOPI partners have budgeted $5,000 to cover all marketing costs.

Funding.  LNHS received an $18,000 grant from the Greater Lafayette Community Foundation to provide outreach, counseling and trainings through HOPI. LNHS also received a $62,500 grant from NeighborWorks America to fund a statewide foreclosure relief loan fund. This fund will be used to make short-term loans to eligible borrowers to cure their delinquency and avoid foreclosure.

There are currently about 15 active partners in HOPI, with others participating as needed. Everyone is enthusiastic and excited about the initiative and feels their work is important, since foreclosure is an issue that affects everyone. The partnership has helped LNHS form new and stronger ties with local government, businesses and residents.
 
In the past two years, LNHS has saved 106 households from foreclosure. The HOPI partnership has supported this effort and helped LNHS to successfully serve homeowners in need.

• Start with a strong core of partners. Begin this type of initiative with a strong core of partners who are committed to the cause. Be sure to include members from the housing industry, businesses, and community members. The group will need widespread support and local statistics.
   
• Focus on the positive. Although foreclosure is a negative experience, resolving the issue is both positive and empowering. Rather than focus on blame, know the causes of foreclosure and turn the community’s attention toward solutions.
   
• Create clear and concise goals and outcomes. Partners must understand the program process and know what is expected of them so they do not become overwhelmed with the complex nature of the issue.
   
• Focus on solutions when raising funds. Funders like to hear about solutions to problems. Foreclosure prevention is a popular initiative nationwide and there are numerous funding options available.
   
• Realize that some foreclosures are inevitable. Create a plan for this outcome that involves a strategy to avoid abandonment and keep home inhabited. When a home is foreclosed upon, try to keep it a neighborhood asset.

Agency interview on 10-04-05 with Patricia Stephenson, Executive Director