In America, a family is losing its home every 13 seconds.
This appalling statistic brings home the punishment working families are taking from the foreclosure crisis, a crisis acting like a cancer on the economic recovery. We at ACORN applauded President Obama's "Making Home Affordable" plan to stop 3 to 4 million of the expected 9 million foreclosures over the next four years, but more needs to be done - much more.
As documented in a new report that ACORN released Wednesday, "Road to Rescue", strong community organizing resulted in Philadelphia pioneering the most successful anti-foreclosure program in the country.
By requiring lenders seeking a foreclosure to sit down with the distressed homeowner and mediate a resolution, the Philadelphia Foreclosure Diversion Program has succeeded in keeping 78% of families in their homes. If those families had been in other jurisdictions they would have lost their homes to foreclosure. It turns out that forcing mortgage servicers to review each case and explore foreclosure-avoidance solutions like affordable modifications - which is, after all, their job - results in more families keeping their homes!
Given a success rate like that in a city like Philadelphia, it is clear that mandatory mediation holds the key for solving the foreclosure crisis - but only if it is replicated correctly and gets a financial boost from the feds.
And maybe the feds are paying attention. Here's President Obama on his foreclosure plan:
"In addition, as part of the recovery plan I signed into law yesterday, we are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing."
He's talking about the Neighborhood Stabilization Program, which helps communities deal with the fallout from the foreclosure crisis by purchasing properties and rehabbing them to prevent neighborhood blight and decay.
Unfortunately, despite the President's wise words, these funds currently can't be used to go upstream and prevent foreclosures. Yet we continue to send hundreds of billions of dollars to Wall Street. It's time to stop treating the symptoms and start treating the cause. It's time for a major commitment to invest in local programs that help homeowners. It's time for a major federal investment in state and local mandatory mediation programs.
Here's why. The successful Philadelphia program includes four key elements:
1) Mandatory participation for lenders,
2) Extensive community outreach including door-to-door canvassing,
3) A low threshold for participation by homeowners, and
4) Utilization of the expertise of housing counselors.
This costs money. Not the billions we're shipping to Wall Street, but generally more than state and local governments have in these troubled economic times. And a federal investment in mandatory mediation via local and state governments would help twice. Once by providing funds that circulate immediately and once by preventing further erosion of the tax base due to falling property values.
The Philadelphia model is catching on in hard hit areas across the country. For example, foreclosure-rocked Orange County, FL recently implemented its own mandatory mediation program.
If we want to end this crisis and take on one of the core issues contributing to the economic meltdown, we need widespread adoption of programs and can replicate Philadelphia's smashing success.
Share this report with your local and state elected officials and judges, tell them about Philadelphia's smashing success, and ask them what they're doing to force banks to behave and do their share in stopping foreclosures. Tell your federal representatives about mandatory mediation, and ask them why for every $1000 we fork over to Wall Street, we spend only a measly $1 on foreclosure prevention.
The Philadelphia program is a clear example of how, despite the complexity of the foreclosure crisis, there are simple, but powerful solutions, often won through the insistence and engagement of average citizens, to this issue. Indeed, community organizing created a program that can eliminate better than three-quarters of owner-occupied foreclosures.
We have the right solution, now we have to spread it!