New Haven Independent

Leaders of the drive announced their plans at a press conference Thursday in front of a home on Division Street — the home of someone who, with help, managed to avoid being foreclosed on.

The new drive — dubbed “ROOF,” for Real Options Overcoming Foreclosure — aims to repeat that happy outcome citywide. Foreclosures jumped 80 percent here last year; they’re projected to increase at a similar pace this year. The number of abandoned houses has climbed to around 500, according to Mayor John DeStefano (in top photo).

DeStefano convened a task force of not-for-profit sector experts to come up with a plan for tackling the crisis. The group is led by Carla Weil of the Community Loan Fund; Robin Golden, a former housing authority and Board of Ed official who now works at Yale Law School’s legal services unit (in photo with DeStefano); and Sameera Fazili (pictured at left), who also works for Yale legal services. ROOF will be housed at the Loan Fund.

The group’s campaign has three goals: reaching out to thousands of New Haveners at risk of losing their homes; offering them help early on; and gaining control of houses lost to foreclosure before they drag down swaths of the Newhallville, Fair Haven and Dixwell neighborhoods. Those three neighborhoods have the highest percentage of foreclosure lawsuits.

The campaign’s budget is $500,000. The city’s contributing $100,000 toward it, the mayor said. Other funders (and in-kind contributors) include the Connecticut Housing Finance Authority, the First City Funding Corporation (parent of the city’s fledgling community development bank), and NeighborWorks.

One important piece of the local foreclosure crisis over which New Haven probably has the most potential influence — the aggressive filing of foreclosure suits by the Water Pollution Control Authority (WPCA) over sometimes minimal debts, a practice fought and then stopped years ago at Yale-New Haven Hospital — at this point is not on the task force’s agenda.

Reaching Out

What is on the agenda: targeting the crisis’s ground zero in the hardest-hit neighborhoods, Newhallville, Fair Haven and the Hill.

The task force has identified 4,000 households in New Haven at risk of foreclosure due largely to adjustable-rate mortgages (ARMs). Those mortgages are often made to families with shaky credit; they start out at low interest rates, then leap to higher rates after a couple of years, at which point many borrowers can no longer afford payments and risk losing their homes. Nationally, the “re-sets” on those loans triggered what has become a foreclosure wave.

ARMs often (not always) fall into the category of “sub-prime” loans. Some 14.6 percent of New Haven subprime loans — mortgages given often to working-class or low-income people on costlier and sometimes impossible-to-meet terms — were in delinquency in 2007.

The new ROOF team plans to send aldermen, city neighborhood specialists, and ministers to knock on the doors of the ARM holders in the three identified neighborhoods. These volunteer ambassadors will preach the importance of dealing with lenders at the early stages of falling behind on mortgages; and of avoiding scammers seeking to make money off borrowers in trouble.

The borrowers will be directed to local not-for-profits set up to help. Chief among them: Neighborhood Housing Services (NHS), where Bridgette Russell (pictured) has been working miracles, saving people’s homes by negotiating new loan terms with lenders and finding government or not-for-profit money to supplement payments. (Click here to read a story about that.)

The ROOF team plans to set up a 211 hotline for foreclosure help. And it’s raising money for a community investment fund to try to gain control of certain properties in the foreclosure pipeline.

The idea there, according to Carla Weil, is to zero in on streets facing the most concentrated impact of foreclosures. The fund would seek to obtain abandoned homes before speculators do at auctions or subsequent private sales.

Weil (pictured) said the group hopes to negotiate on a large scale with the single biggest purveyor of foreclosure suits in New Haven: Deutsche Bank. Deutsche has accounted for a full 12 percent of all foreclosure actions in the city since 2006, Weil reported.

WPCA Spared

It remains to be seen whether New Haven’s foreclosure-fighters will have any influence — or access to a decision-maker — at the German-based global financial institution.

The group does have direct ties to and influence with people who run another major institutional contributor to the city’s foreclosure crisis: the Water Pollution Control Authority (WPCA). But the group has no plans to engage the WPCA.

The WPCA has come under fire from legal-aid lawyers, some politicians and a state judge for its aggressive filing of foreclosure suits against homeowners with piled-up back sewer bills.

Saying it needs to improve a 93 percent collection rate that penalizes bill-paying customers, the WPCA has The WPCA has filed foreclosure suits on over 130 city property owners since mid-2005.

That was when the administration of Mayor DeStefano — who appointed the members of the current foreclosure task force — converted the WPCA from a city agency to a private agency. The idea then was to collect some quick cash to plug a one-time budget hole. The decision meant losing control (though not influence; the city is represented on the WPCA’s board) over the agency’s practices.

So when the agency hired private lawyers to collect back debts, in an arrangement that maximizes their profits by driving up fees rather than settling cases and helping debtors, City Hall was silent. Even though the mayor helped lead a successful campaign years earlier against Yale-New Haven Hospital for the same predatory practices.

Targets of the WPCA’s (like the hospital’s) foreclosure suits generally pay up before losing their homes. But in the meantime the piling on off court cases and lawyer’s fees pushes them deeper into a hole and renders them more vulnerable to eventual foreclosure. Some of the property owners are out-of-town speculators who have abandoned their properties. Others are local families struggling with hard times.

Ironically, one case involves a family on Dixwell Avenue being represented by Yale’s law clinic. The WPCA sued to foreclose on their $260,000 home over $793.10 in back bills. Their attorney, Yale’s Stephen Wizner, said the family sent in $200 to start paying down what was originally a $993 debt, but that wasn’t enough to stop the WPCA from filing suit.

Asked why Wednesday why the WPCA isn’t a part of the new ROOF effort, Weil and Fazili said the issue hadn’t hit the task force’s radar. After a series of Independent articles, the issue did hit the radar of the Board of Aldermen, where President Carl Goldfield conducted detailed a public briefing and grilling of WPCA officials.

Previous Independent coverage of New Haven’s foreclosure crisis:
• A Bidder Shows Up
• Bank Beats Tanya’s Bid
• Westville Auction Draws A Crowd
• DeStefano: Foreclosure Plan Ready
• Can They Help?
• “We Should Over-Regulate These Bastards”
• Rosa Hears of Rescues
• WPCA Grilled on Foreclosures
• WPCA’s Targets Struggle To Dig Out
• Sue The Subprimers?
• WPCA Hearing Delayed
• Megna’s “Blood Boils” at WPCA Tactics
• Goldfield Wants WPCA Answers
• 2 Days, 8 Foreclosure Suits
• WPCA Goes On Foreclosure Binge
• A Guru Weighs In
• WPCA Targets Church
• Subprime Mess Targeted
• Renters Caught In Foreclosure King’s Fall
• She’s One Of 1,150 In The Foreclosure Mill
• Foreclosures Threaten Perrotti’s Empire
•“I’m Not Going To Lay Down And Let Them Take My House”

The following links are to various materials and brochures designed to help homeowners avoid foreclosure.

How to prepare a complaint to the Department of Banking; Department of Banking Online Assistance Form; Connecticut Department of Banking, Avoiding Foreclosure; FDIC Consumer News; Statewide Legal Services of Connecticut, Inc; Connecticut Bar Association Lawyer Referral Service.

For lawyer referral services in New Haven, call 562-5750 or visit this website. For the Department of Social Services (DSS) Eviction Foreclosure Prevention Program (EFPP), call 211 to see which community-based organization in the state serves your town.

Click here for information on foreclosure prevention efforts from Empower New Haven.

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