City works to prevent foreclosures

By Jenny Davis (contact)

Thursday, Nov. 13, 2008 | 11:28 a.m.

Experts on foreclosure prevention addressed the Las Vegas City Council Nov. 5 describing how the city is working closely with mortgage lender Fannie Mae and counseling agencies to keep people in their homes.

RealtyTrac, an Irvine, Calif., company that tracks foreclosure rates, reported Oct. 23 that in the Las Vegas area, 26,304 foreclosure filings were reported in the third quarter — up 21 percent from the previous quarter and up 129 percent from the first quarter of 2007 — giving the Las Vegas area the second-highest metro foreclosure rate in the nation.

The Neighborhood Stabilization Plan, a federal program that provides funding to local governments to help respond to rising foreclosures and declining property values, will provide the city with $21 million. But none of it will be applied to foreclosure prevention or intervention, said Stephen Harsin, director of the Department of Neighborhood Services.

The funding will be used to make bulk purchases of foreclosed homes in nine ZIP codes where foreclosures are or are projected to be amongst the highest in the city. The houses will be purchased at a 15 percent discount below current appraised value. Some of the homes will be included in a lease-to-own program aimed at those earning up to 120 percent of area median income (AMI). Others will be used as rental housing for those earning up to 50 percent AMI.

A portion of the funding may also be used for a down-payment assistance program for those earning up to 120 AMI and to rehab purchased properties when necessary. Harsin will give a more detailed explanation of the distribution of funds during the Nov. 19 City Council meeting.

To assist in foreclosure prevention, neighborhood services has created a Foreclosure Prevention Partnership Program, which brings private and public sector interests together. The program has created a link, Foreclosure Information, on the city's Web site and has created a hotline, 229-HOME, for those seeking help with referrals and services.

Also, within the next several months, the program will conduct foreclosure prevention forums in neighborhoods around the city. The first meetings on Dec. 12 and 13 at Centennial Hills Community Center will assist invited borrowers, who were contacted by Fannie Mae through concentrated mailers. Those borrowers are struggling home owners whose loans are somehow tied to Fannie Mae. The first meeting will be for borrowers in ZIP codes 89108, 89030, 89031, 89032 and 89128.

The meetings are different than general foreclosure prevention meetings the city has conducted in the past because Fannie Mae consultants will be able to assist borrowers with their specific needs to keep them in their homes.

The forums are one of many the things Fannie Mae is doing to address the specific needs of Las Vegas, said Zeeda Daniele, senior business manager with Fannie Mae.

Making sure borrowers are not only working with lenders but nonprofit counseling agencies is another objective, Daniele said.

The nonprofit counseling agencies around the valley, including Consumer Credit Counseling Service, play an intricate part in foreclosure prevention, Daniele said. Depending on the borrower, the counselors may be able to help re-modify mortgages so that the homeowner can stay in the home or help borrowers through the foreclosure process.

There is a wrong way and a right way to go through the foreclosure process, said Michelle Johnson, CEO of Consumer Credit Counseling.

The first step is to contact a nonprofit, U.S. Department of Housing and Urban Development-certified counseling service, Johnson said. The service can help the borrower plan financially throughout the foreclosure process.Follow-up on how the Dec. 12 and 13 meetings went will be addressed during an undetermined City Council meeting.

Jenny Davis can be reached at 990-8921 or jenny.davis@hbcpub.com.