by Frank Lewis
From ABC News: "Later today, the President will announce administration plans to allocate $1.5 billion of TARP money toward funding state Housing Finance Authorities (HFAs) in the five states hardest hit by the housing crisis. … HFAs in California, Florida, Nevada, Arizona, Michigan will have access to new money.
The Coalition on Homelessness and Housing in Ohio is not pleased:
"Fourteen years of record foreclosure numbers — almost 90,000 last year alone — and we're excluded from federal help? Washington is throwing Ohio on the trash heap," said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio (COHHIO).
… According to the latest Home Affordable Modification Program (HAMP) report, the administration drew the line on which states to fund by using states' 60-plus-days delinquency rates. States chosen were higher than 12.5 percent. Ohio's fourth quarter delinquency rate, according to today's report by the Mortgage Bankers Association, is 11.5 percent.
[According to the same report], 15.7 percent of all mortgage holders in Ohio are either in foreclosure or past due in their payments by at least 30 days. That's up from 13 percent from the first quarter, 14.3 percent from the second quarter, and 15.3 percent in the third quarter 2009.
Ohio Supreme Court foreclosure filings also were released this week. Ohio set another record in 2009 with 89,053 foreclosure filings, a 3.8 percent increase over 2008. While three-fourths (65) of Ohio's 88 counties posted increases, more than a third (34) had double-digit increases.
… Faith is urging the Obama Administration to increase the allocation and help the other states, such as Ohio, that are suffering significant damage from the foreclosure crisis. "Obama is trying to stabilize the five hardest hit states in an effort to improve foreclosure numbers nationally. That certainly won't help Ohio, and it won't help the nation in the long run."
But The Atlantic's Business blog likes Obama's approach:
… [O]ne of the problems with the home buyers credit is that many homeowners who would have bought a home anyway still get the government money. That causes needless government spending. By targeting the worst-hit states, the unintended beneficiary problem will be less severe, though it's impossible to eliminate entirely.
I also like the idea that state governments will essentially have to "earn" this month by coming up with innovative ways to prevent foreclosures. … So what will these states come up with? Principal reductions? Payment deferrals for the unemployed? Home to rental conversions? Presumably anything goes — so long as the Obama administration approves.
Obviously the administration had to draw lines somewhere, and COHHIO's statement on the announcement probably would've sounded a lot different if Ohio were selected and Michigan got stiffed. But in Cleveland, where the national media send reporters for on-the-ground reporting on the foreclosure nightmare, it's hard not to despair that help is ever coming. And it's a shame that Ohioans who've been dealing with the crisis since before most of the nation realized there was one won't be able to contribute to this federally funded search for solutions.
“Foreclosure prevention counseling is the one tool we have proven over and over again works to get homeowners out of foreclosure and back into their homes," says Cleveland ESOP executive director Mark Seifert. "Yet, while big banks continue to get TARP subsidies, foreclosure counseling is the one tool the Obama Administration refuses to fund." (More on this.) — Frank Lewis