street roots
7
June 8, 2012
HOLD 'E M , fro m page 1
Affordable Housing Trust Fund. The rest
went into the state’s cash reserves.
The legislature in Virginia is proposing
using the bulk of it s $66 million settlement
allocation to offset reductions in state aid to
local governments, and cover a 3 percent
pay raise for state employees.
In Georgia, according to the report, none
of the $99 million of its settlement was
allocated for housing. All of it went into two
programs that distributes grants for
economic development across the state.
In South Carolina, House Republicans
voted to give all of its $31 million to the
state’s Commerce Department to create
incentives for companies to relocate to
there; Democrats want some money used
for foreclosure assistance programs. The
attorney general there is calling for the
money to be used for shelters for battered
women and homeless veterans.
Wisconsin applied $26 million of its $30
million in settlement funds to plug it’s
budget hole, with the rest allocated to
investigate mortgage fraud. Likewise, Utah
lawmakers voted to keep the bulk of its
settlement in its general fund, allocating less
than $4 million out of $22 million for
homeless and mortgage fraud programs.
Those states that have committed to
housing programs have applied the funds
toward mediation services, like Oregon,
down payment assistance and Legal Aid
programs.
In Oregon, there are strong opinions
about how the money should be spent, and
what programs it should be spent on. Some
view the $7.6 million allocation as tepid and
are wary of support on the part of
lawmakers for a new and untested statewide
program.
“Everyone is being cautious and
conservative because there are a lot of
unknowns,” Martin says.
It’s not yet clear, she says, exactly how
the mediation program is going to work, or
how many people will participate in it.
Ben Pray is the policy advisor and
communications manager with the Oregon
Housing and Community Services, which
manages state housing funds and will
operate the mediation program. OHCS
intends to have the mediation program up
and running by mid-July. But Pray says he
does not expect the program to be fully
operational and robust until this fall.
The Emergency Board’s allocation of the
settlement dollars will pay for the mediation
program for the next three years. Advocates
expect that the program will not need
continued funding from settlement funds
after that. One of the law’s provisions
creates a funding stream for the mediation
program by collecting a $100 fee when a
notice of default on mortgage payments is
filed. The collected fees are expected to
make the program self-sufficient within a
few years.
(The total cost of mediation services is
$400 for each homeowner, who will pay half
the cost).
Critical to ensuring that people
participate in the mediation
* program,
advocates say, is an effective outreach
campaign that can reach out to as many
homeowners as possible. An effective
outreach program, Martin and Byrd say,
would include canvassers going door to door
to reach homeowners, phone banking,
community forums, and other activities to
reach as many homeowners as possible
before it is too late to prevent their
foreclosure from happening.
The Emergency Board allocated $450,000
for outreach efforts. The original request
was double that number — $900,000. Martin
credits the reduction with a sour taste left
in the mouths of legislators from prior,
unsuccessful outreach efforts.
Effectively convincing homeowners to
participate in mediation and helping them
overcome “five years of learned distrust for
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foreclosure relief,” she says, will be an uphill
“That is still something up for
battle.
discussion,” Pray says.
Also critical to the mediation program’s
“None of those ideas have been
success is how knowledgeable homeowners
thoroughly vetted,” among advocates or
will be about their
other groups, Byrd
situation, and how
says.
ready they will be to
“It’s up to us to
go to bat with their
convince legislators,”
1» Oregon, there are strong
lender. That, Pray and opinions about how the
Byrd says.
others say, is where
Martin admits it’s
money should he spent, and tempting
housing counselors
to provide
what
programs
it
should
be
come in — people,
direct assistance to
certified by the
homeowners. But
spent on. Some view the
federal government’s
she also says the
$7.6
million
allocation
as
Housing and Urban
money would not go
tepid
and
are
wary
of
Development
as far as creating a
support on the part ol
department, that
program that can
typically work for non lawmakers lor a new and
help many, with long
profit agencies and sit
term impacts. “Do
untested
statewide
program.
down with
you help 30 families,
homeowners one-on-
or do you help
one to talk about the
everyone?” she says.
homeowner’s particular situation, and what
Martin also hopes that the Legislature
options are available to them. They can also
will continue using the settlement dollars to
help homeowners fill out paperwork and do
fund foreclosure prevention programs. If the
whatever else to prepare them for a
$7.6 million is all that will be spent, it’s “not
mediation session with the bank.
what I would call sufficient,” she says.
“It’s not the easiest system for people to
“Oregon would be in the column of ‘didn’t
navigate on their own,” Byrd says, speaking
do a great job.’”
to the critical role counselors can play.
But there’s another pot of money that
Currently, there are approximately 20
could be used for direct assistance — almost
housing counselors in the entire state.
$180 million left from the Troubled Asset
Eastern and rural parts of Oregon don’t
Relief Program (TARP) bailout in late 2009.
have any. “The demand for those services is
According to Pray, that money is earmarked
high,” Pray says. “It can be a month before
for direct assistance to homeowners.
you can talk to someone.”
And there’s yet a third large amount of
money that has gotten even less attention.
Pray says the Oregon Community and
Housing Services department expects to at
As part of the national mortgage settlement
least double the number of housing
agreement, Oregon loan services have
access to $250 million dollars that can be
counselors with the Emergency Board’s
used for direct assistance to homeowners.
allocation.
But, Pray says, that money is in the hands
A question still unanswered is how much
of the five major banks, which get to decide
of the remaining settlement money will be
how and when the money is spent.
used to directly assist homeowners — help
“That money is a little nebulous right now
them pay back payments, reduce their
about how it’s going to work,” Pray says.
principal balance, or other direct forms of
“It’s to be determined.”
financial assistance.
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