| (11/26/08) - Mayor Don Plusquellic today
announced a new program in the city’s multi-pronged approach to impact the local
effects of the home ownership crisis that has occurred as a result of the nation’s
economic downturn. "Nationally, the number of
homes in foreclosure is unprecedented in our recent history," said Plusquellic.
"No single approach can work alone. That is why have been attacking this problem on a
number of levels. To date, County Executive Russ Pry and I have worked together with
numerous groups to preserve home ownership.
Letter to Treasury Secretary Paulson
The Mayor released a letter (176k pdf) that he sent last week to Secretary of
the Treasury Henry Paulson, suggesting that Akron become a pilot program that would:
Provide direct assistance to homeowners in
danger of losing their homes; and,
Assist lenders whose loans are about to go
into foreclosure; and,
Impact neighborhood property values where
residents and banking institutions alike face declining conditions when foreclosures
occur.
"The existing federal program actually prohibits us
from helping a homeowner who is about to lose their home," said the Mayor. "We
need to act while the resident is still in the home, and with a little help can save the
property from foreclosure."
Plusquellic asked Paulson to consider a $23.5 million
investment in a pilot program in Akron that would be consistent with Congress’
intention, whereby the City would act as a "bridge" for the homeowner in crisis.
Funds received by the City would be paid directly to lenders to restructure home loans to
an affordable level - either by reducing the interest rate, or extending the term of the
loan, or in some cases, doing both.
"Many homeowners need just a little assistance to keep
their family in the house they have been paying on and keeping-up," said Plusquellic.
"It makes no sense that we allow a foreclosure to occur, and then after they are
evicted, offer housing assistance to these families.
Help for Those Threatened With Foreclosure Now
In his State of the City address in February, Plusquellic
announced that the City was teaming - up with the Neighborhood Assistance Corporation of
America (NACA) to provide a different kind of assistance for homeowners struggling with
mortgage payments.
"Since last Spring, NACA has been available to Akron
homeowners through its Cleveland office to negotiate on their behalf with national banks
and mortgage companies to restructure loans headed to default," said the Mayor.
"Now, we are asking them to expand their efforts."
NACA will open a satellite office at the Balch Street
Community Center in the central part of the city. In coming months, NACA will hold
foreclosure workshops in Akron and will staff the Balch Street office two days per week
beginning December 15.
NACA is one of the largest and fastest growing non-profit
mortgage service agencies in the country. It specializes in helping homeowners to make
unaffordable mortgage payments affordable.
New Federal Grant Will Make Comprehensive Assistance
Available
The City of Akron this week is submitting its application
to the U.S. Department of Housing and Urban Development for the proposed use of $8,583,492
for the Neighborhood Stabilization Program (NSP).
Congress authorized the Housing and Economic Recovery Act
this summer, which provides funding to local governments to address the impact of
foreclosed, abandoned and blighted properties on neighborhoods as a result of the housing
mortgage crisis. Funds can be used for acquisition of property, housing rehabilitation,
demolition, relocation, open space and financing mechanisms.
"We will not only protect the significant investment
the community has made in our neighborhoods," said Mayor Don Plusquellic, "but
we will also leverage that investment with future improvements in the future. We need to
target areas where residents have made significant investments, and their homes are
impacted by those that become abandoned due to foreclosure. "
Modeled after the successful Community Development Block
Grant Program, (CDBG) the NSP allows communities to craft their own programs within the
framework of HUD regulations.
The Akron area’s median income is $61,700. NSP funds
must benefit households making less than 120% of that figure ($74,040 for a family of
four,) and 25% of the NSP funds must benefit families earning less than half of the median
income ($30,850 for a family of four.)
"While we appreciate this new infusion of funds to
address this problem," said Plusquellic, "$8.5 million does not go far in a
community with needs such as ours. That is why the U.S. Conference of Mayors has informed
Congress of a host of projects that could be undertaken quickly to improve our housing and
infrastructure and put our citizens back to work. This is consistent with President-elect
Obama’s urging of Congress to consider a new stimulus package that will address a
major effort on rebuilding America’s infrastructure."
The City expects funding to be received by March of 2009.
Use of NSP Funds by Akron
$2.8 million - Home Purchase Assistance and Property
Acquisition
$2.15 million - Housing to benefit persons at 50% of median
income
$1.5 million - Rehabilitation of properties
$1.18 million - Housing demolition
$100,000 - Relocation
$853,000 - Permitted administration fees
For more Information, contact:
John Moore, Interim Director of Planning & Urban Development
330.375.2770 or (cell) 330.812.7690
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