Some city leaders fear that Rochester’s foreclosure rate is becoming a full-blown crisis. To address this issue, the Rochester Foreclosure Prevention Task Force has been hearing ideas in order to better assist homeowners who are struggling with foreclosures.
Though laws provide strict regulations regarding proper notices and opportunities to pay before a property is sold in a foreclosure sale, 1 out of every 200 homes, on average, will still be foreclosed upon.
According to The Daily News, Batavia has been dealing with a recent rise in foreclosures, and the task force is looking for solutions.
“Everybody [involved] wants you to keep your house if that’s what you want,” said Luann Brink, member of the Housing Council at Pathstone, as she spoke at the opening meeting of the Foreclosure Prevention Task Force. “The judge is not there to prejudge you. We’re not going to fault you for how you got into that satiation… which surprisingly, isn’t often bad budgeting.”
The Census Bureau reports that every year since 1980 roughly 43 million Americans (16.8% of the population) end up having to relocate. In poorer communities, foreclosures are often the cause of many of those moves.
“A lot of times, people get the foreclosure notice and run; they don’t realize it’s a lengthy process and they have options,” said Trisha Isaman, director of foreclosure prevention at The Housing Council at Pathstone. “Or people bury their heads in the sand and hope someone fixes it.”
The Democrat and Chronicle reports that New York, specifically the Rochester area, has been hit very hard in the foreclosure department over the last few years. The inner-city home values in Rochester have not recovered since the Great Recession, and in fact, they continue to decline. And when a home’s mortgage is more expensive than the home’s value, there’s little incentive for economically-stressed homeowners to keep paying for their underwater home.
“There are so many cities like Rochester that are still in need of relief and stabilization,” said Sarah Edelman, a housing finance policy analyst at the Center for American Progress, to Rochester’s Democrat and Chronicle. “The conversation in Washington has moved past the foreclosure crisis in some respects.”
One of the proposed solutions that the task force is considering involves receiving financial help from the New York State Mortgage Assistance Program. The program would pay up to $40,000 to homeowners who are delinquent on their mortgages in a no-interest, 30-year loan. Though this program should only be used as a last resort, it can provide homeowners a chance to improve their home’s value and get their finances in order to successfully pay off their debts.
In other parts of the country, home values are rising, and home improvement loans are driving new investments in residential real estate. Spending as little as 5% of a home’s value on landscaping projects can result in return on investments (ROI) of as much as 150%. However, these projects make little sense in an area with falling home prices, which can set off a dangerous cycle of decline.
An additional proposed option would be setting up short sales when a borrower who doesn’t want to remain living in that particular property can sell their house for less than is owned. While the Rochester Foreclosure Task Force has just begun work, many residents are in desperate need of relief.