The Ohio Foreclosure Prevention Initiative
|Category: ||Community Impact, Postpurchase Programs
|Keywords: ||Foreclosure Prevention, Statewide Partnerships
|Information About Organization:|
|Name: ||Columbus Housing Partnership, Inc.
|Address: ||562 East Main Street
| ||Columbus, Ohio 43215
|Contact: ||Amy D. Klaben, Executive Director
|Web Site: ||http://www.chpcolumbus.org
Columbus Housing Partnership (CHP) in Columbus, Ohio, is participating in a statewide foreclosure-prevention initiative to help families preserve homeownership.
Columbus Housing Partnership is a private, nonprofit organization that was founded in 1987 with a mission to strengthen families and communities through decent and affordable housing. CHP offers services to low- and moderate-income families in Columbus and the surrounding areas, including pre- and postpurchase counseling and education, down-payment assistance, and home construction and rehabilitation.
The Ohio Foreclosure Prevention Initiative is a statewide partnership that was developed in February 2005 by the Federal Reserve Bank of Cleveland and NeighborWorks America to address significant foreclosure issues in Ohio. At the time, Ohio had the highest foreclosure rate in the nation, 65 percent higher than the U.S. average. The number of foreclosures in the state had doubled over the course of five years, with more than 63,000 in 2005. This situation was working against all neighborhood revitalization activities, leading to vacant homes and reduced property values. Existing homeowners desperately needed help.
In 2005, NeighborWorks America’s Great Lakes District in Cincinnati helped form a statewide coalition of NeighborWorks organizations in Ohio to share strategies, combine resources, and leverage partnerships to reduce the rates and risks of foreclosure. The partnership was modeled after Neighborhood Housing Services of Chicago’s Home Ownership Preservation Initiative.
Program Goal. The goal of the Ohio Foreclosure Prevention Initiative is to provide homeowners with foreclosure prevention information and services in order to keep them in their homes and preserve neighborhood stability. Partners provide foreclosure-intervention training to housing counselors throughout Ohio and teach counselors how to negotiate with lenders on behalf of a borrower. The program encourages homeowners to seek help as soon as problems arise and work with lenders to develop loan-workout solutions, such as delayed payments, refinancing, new payment plans, or home sales.
Partners. Twelve community-based organizations in Ohio are involved in the Ohio Foreclosure Prevention Initiative, including CHP, 10 NeighborWorks organizations and the Corporation for Ohio Appalachian Development. Additional partners include NeighborWorks America, CitiGroup, National City Bank, JPMorgan Chase, and various local lenders. Some lender partners support the overall state program while others connect with individual agencies. In addition to financial assistance, lender partners also provide information on the complex processes of mortgage lending and workouts.
Partnership Meetings. At least one representative from each NeighborWorks organization participates in a statewide planning committee for the initiative. This group meets every two weeks for about an hour via telephone. Committee members then return to their agencies and share information on current data, ongoing issues, marketing strategies, and program plans.
Program Offerings. Some or all of the following services are provided by each partner agency: budget, credit and default counseling; rescue funds; financial restructuring; assistance with short sales; assistance with house rehabilitation services; financial literacy training; and information on the Homeownership Preservation Foundation’s nationwide crisis hotline.
24-Hour Hotline. Access to the free, 24-hour foreclosure prevention hotline – which is administrated by the Homeownership Preservation Foundation and linked with NeighborWorks America – is one of the primary components of the Ohio Foreclosure Prevention Initiative. Any person who calls the toll-free number (888-995-HOPE) is connected with a live, third-party counselor from the Credit Counseling Resource Center (CCRC) based in Minneapolis. Hotline counselors help callers assess their situation and create a plan of action. This resource is available 24 hours a day, 7 days a week, 365 days a year.
CCRC hotline counselors are from Auriton Solutions, Consumer Credit Counseling Services of Atlanta, Novadebt, and Springboard Nonprofit Consumer Credit Management. NeighborWorks America helped members of the Ohio Foreclosure Prevention Initiative forge this relationship with CCRC and tap into the hotline service.
Counseling. In addition to the crisis hotline, housing counselors at each agency also meet with homeowners individually to assess their situation, determine specific needs, make referrals, and develop solutions. Counselors walk customers through their resolutions, if needed.
Education and Financial Assistance. Each partner incorporates foreclosure prevention information into existing homebuyer and postpurchase education programs. In addition, counselors connect consumers with local financial assistance options.
Marketing. Partners from the Ohio Foreclosure Prevention Initiative have produced an extensive marketing campaign to promote program services throughout the state. Each partner has received templates to use for public service announcements, print ads, brochures, and other media-relations materials. These templates are tailored to each community and include local contact information, including agency and partner information.
In Columbus, Columbus Housing Partnership is marketing the program through public service announcements on eight local television stations and 11 local radio stations. Staff are also driving a grassroots marketing effort to post fliers and distribute materials at businesses and agencies in targeted ZIP codes that have high rates of foreclosure.
Costs. Costs include staffing, marketing, and program materials. CHP estimates the expense to be about $100,000 a year. All program responsibilities have been assumed by existing staff.
Funding. Statewide lending partners such as National City Bank and JPMorgan Chase provide program funding to NeighborWorks America, which then distributes the funds to participating agencies. Each network organization receives about $25,000 a year from NeighborWorks America, plus independent contributions from local lending partners.
CHP’s housing counseling program receives additional funding support from Housing Partnership Network, National City Bank, JP Morgan Chase, World Financial Network National Bank, Third Federal, and the Columbus Foundation.
The Ohio Foreclosure Prevention Initiative is a historic partnership. Local, state and national entities are working together to educate borrowers on foreclosure prevention and are helping homeowners find solutions. The program is helping neighborhoods and residents achieve and maintain success in homeownership.
In 2005, Columbus Housing Partnership provided counseling to more than 400 families, a 100 percent increase since 2002. Partners in the Ohio Foreclosure Prevention Initiative provided 348 clients with foreclosure prevention counseling, helped 70 clients avoid foreclosure, and saved lending institutions almost $1 million.
- Focus on Solutions. Foreclosure is a sensitive issue for both homeowners and lenders. Financial troubles may result from subprime or predatory lending situations, but may also result from poor financial decisions made by the borrower. Instead of placing blame, it is best to focus on solutions and positive results for each homeowner. Emphasize that successful homeownership is a benefit for all.
- Ease Fears. Often, homeowners are afraid to contact their lender when troubles arise because they are embarrassed or uncertain of the end results. Alleviating fears is a key component of foreclosure-prevention programs, since action on the part of the homeowner is necessary for success.
- Develop Broad Partnerships. Broad collaboration and strong communication are critical. Connect with local programs that are involved in homeownership preservation and neighborhood revitalization and develop effective and ongoing methods of communication. Statewide coalitions can help agencies that are addressing issues that extend beyond city borders.
- Make Marketing Inclusive. Delinquencies can happen to anyone. Create a marketing strategy that helps homeowners feel comfortable approaching the program for help. Use grassroots marketing to provide a longer-lasting message to the larger community.
- Measuring Results. Develop a sound method of tracking and measuring results. This will ensure that program activities are addressing local issues. Track customers by ZIP code to fully understand the needs in each area.
- Conclusion: It makes sense for NeighborWorks organizations to offer foreclosure prevention programs since foreclosures affect not only families and individuals, but also entire communities. Any agency working to revitalize neighborhoods must acknowledge this issue and develop a plan to help homeowners in trouble.
Agency interview on 4-18-06 with: Paul Haggard, Director of Resource Development.