HOMEOWNERS HOST TOWN HALL WITH FEDERAL AND LOCAL OFFICIALS TO DISCUSS FORECLOSURE CRISIS
Underwater borrowers raise need for debate and effective solutions to Ohio’s housing and economic troubles in this election year
AKRON, OH – Homeowners from across the region discussed the impact of the housing and foreclosure crisis affecting their communities with federal and local government officials at a town hall today in Akron. The #MyHomeMyVote event put the housing crisis – and Ohio voters’ real concerns – front and center this election season, with attendees using the town hall’s hash tag to tweet their Members of Congress, the presidential candidates and government agencies to demand action and attention.
The town hall was held at the Akron-Summit Public Library, and co-hosted by Empowering and Strengthening Ohio’s People (ESOP), Asian Services in Action, Inc., and National Council of La Raza’s national “Home for Good” campaign. Speakers included homeowners Oscar Ba’Aye and Mark Smith, Doug Shelby, Northern Ohio Field Office Director for U.S. Department of Housing and Urban Development, representatives from the offices of U.S. Senator Sherrod Brown and U.S. Rep. Betty Sutton, and Holly Miller and Cynthia Sich, of Summit County’s Community Development and Consumer Affairs departments.
“Underwater mortgages are the latest incarnation of a foreclosure crisis that just won’t go away in Ohio,” said Mark Seifert, Executive Director of ESOP. “Yet, the ongoing debate this year has not been focused on underwater homeowners and fixing our struggling housing market. We need real solutions and analysis about the housing crisis if we are to move towards rebuilding and stabilizing our communities.”
Home values have collapsed and mortgage debt is higher than what a house is worth – also known as being “underwater” or having “negative equity.” Ohio has 530,000 families underwater – 25 percent of the state’s homeowners. Almost 40 percent of homeowners in Cuyahoga County are underwater, according to Zillow.com’s real estate database. In Summit County, close to 30 percent of homeowners are underwater – a good indicator of who will default next. Ohio already has the 11th highest foreclosure rate in the country.
“The most urgent policy Congress needs to consider is principal correction – reducing over-sized mortgage balances to meet home values that have declined during the financial crisis and housing bust,” Seifert said.
Despite repeat job loss over the years, Mark Smith and his wife managed to stay current on the house they’d bought in 1985. Then, a work-related injury led to medical bills and loss of income and the Smiths suddenly found themselves facing foreclosure. While they fight for a loan modification on their $94,000 mortgage, the Smiths’ live in an Akron neighborhood filled with homes selling for $70,000. They are underwater through no fault of their own.
Oscar Ba’Aye works on the housing needs of Ka’Ren refugees from Burma/Myanmar now living in Akron. Ba’Aye works to find affordable and sustainable homeownership for this population, which speaks limited English and does not have a “proper” credit history to qualify for conventional bank loans. “We need stable, healthy neighborhoods and I am working hard to make the 44310 zipcode into a desirable place to call home again,” Ba’Aye said.
“It’s time for our elected officials and presidential candidates to listen to homeowners’ needs and voices,” said Michael Byun, Executive Director of ASIA. “They need to understand that they cannot talk about jobs and the economy without talking about how the foreclosure crisis and underwater mortgages – and a lack of principal correction – is preventing people from pursuing a better quality of life and economic opportunity.”
Across the nation, nearly one in four homeowners – almost 16 million – are in this predicament. Estimates of the national “debt overhang” afflicting our housing markets range from $700 billion to over one trillion dollars. A big part of the problem remains the two government-sponsored entities Fannie Mae and Freddie Mac, which together own almost half of all U.S. mortgages. Their conservator at the Federal Housing Finance Agency, Ed DeMarco, refuses to allow principal correction, despite the wide range of economists and experts who agree that principal correction is needed. DeMarco needs to either step aside or make way for principal correction.
Homeowners also asked officials at the town hall about what other important steps Congress can take. Specifically, they asked about legislation that would make it easier for some homeowners to refinance their GSE-owned loans. The “Responsible Homeowners Refinancing Act of 2012” was introduced by U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) earlier this year but has since stalled in the Senate.
While the majority of U.S. loans aren’t yet subject to principal correction, some meaningful efforts are taking place in the private bank sector. However, any such principal balance reductions will be taxed as “income” and homeowners will receive a tax bill unless Congress extends the “Mortgage Forgiveness Tax Relief Act,” set to expire at the end of this year.
Empowering and Strengthening Ohio’s People (ESOP) is a HUD-certified foreclosure prevention counseling agency.
Asian Services In Action’s (ASIA) mission is to empower Asian American and Pacific Islanders in Northeastern Ohio to access quality, culturally, and linguistically appropriate information and services. ASIA is Ohio’s largest comprehensive health and social service agency and serves over 8,000 people annually in 30 languages.
National Council of La Raza (NCLR) is the largest national Hispanic civil rights and advocacy organization in the United States and works to improve opportunities for Hispanic Americans.