June 26, 2008 09:28 am Bill Traynor and Jess Andors
The epidemic of home foreclosures in Lawrence is devastating our families and neighborhoods. Scores of families have lost their homes and savings, and their credit is ruined. Scores more face the same fate if lenders are unwilling to renegotiate the terms of the exotic mortgages that they have underwritten. Foreclosing banks — usually national lenders with scant local presence — have evicted hundreds of tenants. Foreclosed properties, left abandoned and derelict, threaten the hard-won stability and renewal achieved in many Lawrence neighborhoods over the past decade. This problem did not start in Lawrence. It is a part of a complex national crisis that is rocking our economy. But communities like Lawrence, with working-poor and immigrant families hungry for credit and homeownership, have been hard hit — and it is here locally that we must work together to fight it. So what is to be done? Lawrence CommunityWorks, together with the City of Lawrence, our state legislative delegation, and local partners such as Neighborhood Legal Services and Arlington Community Trabajando, has been fighting the foreclosure problem for over a year now. We believe that here are three key strategies that we, the people of Lawrence, need to employ in our collective efforts to stem this tide. We must keep families in their homes. Once a home goes through foreclosure, the costs to everyone skyrocket. The family faces economic wreckage. The lender loses tremendous value. The city tax base erodes. Reclaiming these properties can cost over $100,000 per unit. Preventing foreclosure and eviction is the single most effective and least expensive way to address this problem. Many of our families could afford to stay in their homes under different mortgage terms — and often were wrongly steered toward more exotic products in the first place. LCW provides classes and individual counseling to help families facing foreclosure to understand the process and their options. The most difficult, important element of this is negotiating with banks and servicing companies. To date we have succeeded in helping 27 families obtain loan modifications, refinancing, or sale of their properties and elimination of debt. Another 136 families are in counseling, and over half of these have modification requests pending with their lenders. It is critical that we collectively keep the pressure on lenders to negotiate with local borrowers and modify these loans to terms that a working family can afford. LCW is working with the city and the Massachusetts Office of Consumer Affairs to bring lenders to the table, through a lender event to be held July 17 in Lawrence. At this event, where multiple lender representatives will negotiate directly with borrowers, we hope to help in excess of 100 families to keep their homes. We must do more to help families who have already been devastated by foreclosure. These families are our friends and neighbors, and we need to mobilize around them, much as we have responded to those displaced by the flood of 2006 or recent fires. Later this summer, LCW will launch the Second Chance Program, a bundle of counseling and financial supports for families who want to fix their credit, build new savings and invest wisely in homeownership. We must repopulate vacant foreclosed properties and, when we can, put those properties in the hands of homeowners. At present there are already over 300 foreclosed, vacant homes in the city, and more coming daily. LCW has received $1 million in state housing funding for this express purpose: to acquire these houses and put them back into productive use for working families. We have already purchased four units of housing toward this end, and put in offers on approximately 20 more units. Over the next six months, we hope to buy approximately 35 units of housing, and bring an additional $6 million or more in public and private funds into the city as we work to renovate these homes, which have often been stripped of copper and appliances, and left exposed to weather, animals and vandals. Reclaiming these units is the only way to stabilize neighborhoods and turn the tide back toward renewal of our community. nnn Bill Traynor and Jess Andors are officers of Lawrence CommunityWorks. Juan Bonilla, Lissette Cid and Tamar Kotelchuck contributed to this piece.
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