W
hen the eyes of the nation turn to the All-Star Game in Cincinnati this week, viewers will likely see a pristine version of the city. What they won’t see are hundreds of vacant houses blighting nearby neighborhoods — a haunting reminder the foreclosure crisis is still thriving in Cincinnati.
Nonprofit Working in Neighborhoods (WIN) helps struggling homeowners prevent foreclosure and restore credit. The organization recently released its annual foreclosure report, citing 1,766 homes lost during 2014 in Hamilton County. The report states that 3,350 properties are currently in the process of foreclosure, with an estimated 77 percent of those homes to be sold at Sheriff’s Sale during 2015-2016. The nonprofit began issuing the report following the initial mortgage collapse of 2002.
While foreclosures decreased by 21.5 percent from 2013 to 2014, WIN executive director Barbara Busch emphasizes that the foreclosure rate remains far too high, with numbers exceeding those from the advent of the crisis.
“When we started doing this back in 2002, it was 1,372, and last year it was 1,766 people who were sent out,” she said. “So in my mind, that doesn’t say it’s the end. It simply says that we’re down from the higher numbers we’ve been at, but we’re certainly not where we would like to be.”
The clock is ticking for government assistance, Busch explains, as many federal loan modification programs will end in 2016, including Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP). As economists see the crisis waning, Busch says the federal dollars will cease to provide incentives for banks to work with struggling home owners. In the past, she says their organization has depended on both programs to keep people in their homes.
“So those two programs are extraordinarily important to us, and right now they’re targeting them to end in December of 2016,” she says. “The way our figures look, we don’t see this as being over by then. And given what we’ve seen with the trend, we’re still going to be seeing a disconcerting number of foreclosures through at least 2018.”
Mount Washington resident Kevin Day squeaked in just before the mortgage relief program Save the Dream Ohio quit taking application in 2014. As a former manager at a large company he prefers not to name, Day says he felt secure until the business downsized and then sold. He received assistance until the government sequestration brought his unemployment payments to an abrupt end.
“So I was left with basically nothing,” he says. “We had some savings, and we lived off of that and paid our mortgage for a year. My mindset was everything was going to be fine and I was going to be right back to work — and it didn’t happen.”
As funds grew sparse, Day contacted his bank, where reps referred him to Save the Dream Ohio, a program that provides financial assistance based on need and former payment history. When Day went to apply for the program last year through WIN, he said the room was filled with 20 to 30 others in similar situations.
“I was never late and never missed a payment on my house,” he says. “There’s no way you can prepare for these circumstances. I was one of the last people to get into the program and it was a godsend, because I would have lost my house.”
Job loss accounts for one of three primary reasons for foreclosures, Busch explains; the two others are serious health issues and loss of spouse. In the past, she says families could always sell their homes for a profit when a financial tragedy occurred. But with the deflation of property values, she says home owners often find themselves upside down in their mortgages. Without incentive dollars, Busch says banks see keeping people in their homes as a low priority.
“[Banks] do this thing they call the waterfall where they try to figure out how they’re going to make the most money,” she says. “So if they can make more money by foreclosing, they will, even if you could get a short sale — if the short sale doesn’t bring in as much money then, they won’t do it.”
Although WIN paints a bleak picture of area foreclosures, Shaun Bond, West Shell Jr. chair in real estate and director of University of Cincinnati real estate center, sees local falling foreclosure numbers mirroring national trends. He explains increased wages in the labor market lead to a stronger housing market, which increases home prices. Increased value in homes ultimately decreases foreclosures, he says.
“Failing some terrible shock hitting the economy, I think we’re going to continue to see an improving economy, which will continue to help the real estate market,” Bond says.
One roadblock to recovery might still exist in some of the hardest-hit neighborhoods. Multiple houses in a single community going to Sheriff’s Sale often cause a freefall in the value of neighboring homes, Bond says. Homeowners often hand keys back to the bank as their property has lost so much of its value, he adds.
“That was a process that was very evident going back to the peak foreclosure years in 2009 to 2011,” Bond says. “So we ended up with that negative spiral of foreclosures in an area impacting values, leading to maybe other homes in the area going into foreclosure, and you ended up then with these clusters of foreclosures which often blighted different areas or different neighborhoods.”
As an advocate for change, grassroots group Communities United for Action (CUFA) continues to lobby the city along with fellow concerned citizens for assistance. Many of the group’s members reside in some of the neighborhoods hardest-hit by foreclosure. College Hill resident Deborah Sims explains that as the number of empty houses around hers increase, the value of her home plummets. She says too often vacant properties become infested with pests, overgrown with weeds and pose serious health risks and fire hazards to nearby homes.
“We’d like to see these properties rehabbed, not torn down and turned into vacant lots that create many of the same problems,” she says. “There were 39 foreclosures last year in College Hill, and that’s too many. For every one of those, there’s a face associated with it, and a lot of times a family — we need to care about our neighbors. We need to get these people back in some of these vacant homes.”
South Fairmount resident Dorothy Bush lives in a seemingly post-apocalyptic setting; hers is the sole home occupied amidst seven vacant properties. Bush says when she moved to the area as part of the city’s urban housing project, she was assured the neighborhood was slated for redevelopment. That was back in 1992, she says. Bush also knows the challenges of being unemployed. After suffering a serious health problem and losing her job, she says had it not been for Save the Dream, her home too would now be vacant.
“We need the banks to work with people on modifying their loans instead of eliminating so many of these essential programs,” she says. “The foreclosure crisis is not over. Has it lessened? Yes it has. Is it gone? No it’s not, not by any stretch of the imagination.”
But residents taking matters into their own has hands proved to be a slippery slope. In 2009, police warned Westwood residents they could be arrested for trespassing after boarding up vacant homes, which had become havens for drugs and prostitution.
Due to CUFA’s persistence, South Cumminsville resident Marilyn Evans says the city slated some of the most egregious properties for demolition. In addition, she says the mayor’s office plans to recruit volunteers to help clear weeds and board up vacant properties. But with the revolving door of council members, she says they often see commitment to projects ebb and flow. Evans believes while reform needs occur on an administrative level, the spark for change must occur from within.
“We as people have the responsibility to make sure that the government does their job, and by that we have to do ours,” she says. “And one of the things we have to do is to stop voting people in who don’t support us, who don’t support our communities.”
Cincinnati mayor John Cranley says he’s committed to helping communities fight blight.
“Since I’ve taken office, I have heard complaints from people in neighborhoods about problem properties and absentee landlords,” Cranley said in a statement provided to CityBeat. “The Private Lot Abatement Program is designed to empower neighborhoods and increase the number of properties that we abate each year. Good property owners shouldn’t be forced to see their property values decrease because of a few neglectful people.”
While Evans says the city needs to play a greater role, she emphasizes the lion’s share of responsibility falls on the banks that own the majority of vacant properties. In April 2014, city council amended the Vacant Foreclosed Residential Property Registration Ordinance to require all property owners, including banks, to register and maintain foreclosed properties according to code or face fines. But the neglect still goes on, she says.
“We need people to work with us because until we get these issues addressed, they will grow and grow,” says Evans. “We definitely need participation from the banks, but nowadays they don’t seem to care to work with the communities. It seems like we moved backward.” ©
This article appears in Jul 8-14, 2015.