The foreclosure crisis continues to exert its grip on our nation, and if Pennsylvania Gov. Tom Corbett’s budget passes as-is, homeowners facing foreclosure will have no further assistance in preventing this nightmare.
“I just wanted to thank you for meeting with [Julie] and I this afternoon as we try to salvage the wreckage from our past, our home, and hopefully, move toward a more financial feasible option. Your professionalism and hard work did not go unnoticed and was greatly appreciated by us both. More importantly, you made us feel comfortable for you can only imagine how humbling this experience is and will be for [Julie] and I.” (name changed for privacy)
These words were recently written by a couple seeking refuge from one of the most catastrophic events someone can experience — the loss of one’s home. The foreclosure crisis continues to exert its grip on our nation. 2011 is expected by all accounts to be the worst year yet with an additional two million American homeowners facing foreclosure.
Non-profit organizations such as Mt. Airy USA are assisting homeowners all across the Philadelphia region by working with their lenders to negotiate loan modifications. But if Pennsylvania Governor Tom Corbett’s budget passes as-is, homeowners facing foreclosure will have no further assistance in preventing this nightmare.
Thousands of more homes will be foreclosed upon, neighborhoods will have vacant, neglected properties and communities will suffer across the Commonwealth — simply because of the unwillingness to commit half percent of the proposed $27.3 billion Pennsylvania budget to re-open the Homeowner’s Emergency Mortgage Assistance Program (HEMAP) to provide.housing counseling.
There is no disputing the fact that shared sacrifice is required during these difficult times with “shared” being the operative word. This budget ignores that premise however and places the burden of managing our fiscal woes entirely on the backs of those who can’t afford it.
The assistance that housing counselors provide is very real. Every month, scores of homeowners come through the offices of organizations just like Mt. Airy USA’s. Counselors spend hours with clients, analyzing their credit and budget histories, determining what an appropriate loan burden should be for their current economic circumstances and ultimately offering trained, skilled and certified assistance in working out a negotiation with their lender. Beyond the numbers though, counselors offer their clients a humane side to a largely faceless, tragic set of circumstances.
Opponents to housing counseling programs may argue that scarce taxpayer resources shouldn’t be spent on saving individuals who made “irresponsible” financial decisions. Just as the notion of “caveat emptor” places the burden of home defects upon the buyer once the sale is consummated, one could argue that a similar burden should be placed on mortgagees who took on more than they could chew. That conclusion would be a false interpretation of today’s crisis.
Today’s foreclosure counseling clients are the tens of thousands of long-term unemployed in our country. Individuals who have been out of work for 12, 18, 24 or more months and have come to the end of the line — they have nothing left but their home. Surely, within a short order of separation, almost all of us can identify someone in this position. Imagine if that friend, colleague or loved one came to the end of the road, facing a decision of where he or she may ultimately sleep. Too many of our neighbors are facing this very stark circumstance.
If the Governor’s budget is ultimately intended to preserve long-term investments in Pennsylvania’s future, HEMAP funds should be restored. The health of the housing market is a major determinant in how quickly our economy recovers. If we allow the foreclosure crisis to run unabated by eliminating housing counseling – the last line of defense for homeowners — we will only prolong the housing crisis. Foreclosed upon homes not only depress the values of the affected properties but also drag down neighboring properties and the surrounding neighborhood. The overall loss in property value and, consequently tax revenue, could potentially far outweigh the minor investment it would take to maintain some level of counseling service.
Philadelphia Mayor Michael Nutter Administration’s, in collaboration with the First Judicial District, has established the nation’s pre-eminent program for fighting the foreclosure crisis. Despite claims by the opposition of the general ineffectiveness of housing counseling, Philadelphia’s success shows that we are stemming the tide and winning the war against foreclosure – one homeowner at a time. Let’s make an investment in today and in our collective future. Keep housing counseling alive and allow endangered homeowners to know that a lifeline still exists.
Anuj Gupta is Executive Director of the Philadelphia-based CDC Mt. Airy USA and a new board member of the Philadelphia Historical Commission. He also has served as the Chief-of-Staff/Deputy Commissioner for Philadelphia’s Department of Licenses & Inspections and as Deputy Director of the city’s Office of the Managing Director.