Talk with the boss: Foreclosure problems different, but not easier (Plain Dealer)

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Talk with the boss: Foreclosure problems different, but not easier (Plain Dealer)

Lou Tisler sums up the mission of Neighborhood Housing Services of Greater Cleveland with a simple but meaningful phrase: “Home matters.”

He has been executive director for 71/2 years at the nonprofit based in Cleveland’s North Broadway neighborhood. The group, formed in 1975, helps “people get housing, fix it and keep it.” Its programs include foreclosure prevention counseling, down payment assistance and the NHS Consumer Law Center. A new program, EnergYou, aims to show people how curbing energy consumption can help the environment and their wallets.

The nonprofit serves Cuyahoga, Lorain and Erie counties and runs foreclosure programs in Huron and Medina counties. When Tisler joined Neighborhood Housing Services, it had four employees. Now it has 16 because of expanding programs.

Do you believe funders and policy makers are losing interest in the foreclosure crisis?

It garnered a lot of attention and funding when it was at its height. To go from 90,000-plus foreclosures statewide to 70,000-plus is a big drop; but I would say that it is still a problem. What we have seen is that there was a lot of enthusiasm in terms of “Oh, you have got to fix this issue” and making funding available for that. We’ve seen a decline in that kind of support to “This really shouldn’t be a problem now.” But it still is.

Have fewer subprime loans and lower interest rates changed the nature of the foreclosure crisis?

Even at the height, we weren’t seeing too many 14, 15, 16 percent mortgages at [Neighborhood Housing Services]. It was more of a matter of economics. People bought something they couldn’t afford. People were laid off. People got divorced and lost half their income.

It is still an economic problem, even though interest rates have fallen. People now who have fixed-rate 5 percent or better mortgages are getting behind. Before, when we did see the subprime, it was easy to call a lender up and say, “The people would be able to pay a mortgage if it was at 7 percent. Let’s make a deal.” Everything was fine. Now, you have people at 5 percent, who have lost half their income — often because of underemployment after losing better-paying jobs — and they can’t make mortgage payments. Even if they were lowered to 2 percent, people couldn’t make payments. What do we do about it?

The cases today are much harder. They take longer to deal with. Getting the runaround from the servicers and lenders isn’t as great as it used to be, but that doesn’t mean the process of trying to get affordable mortgages for people has gotten any easier.

What happens when you determine a foreclosure can’t be prevented?

Our goal is to help people avoid foreclosure, and if they can’t, preparing them for a soft landing. A soft landing is an affordable rental, short sale, cash for keys, something along those lines. They still have some control of their exit, as opposed to, “The sheriff sold your property on Monday, and you are going to get the notice soon.”

Your group supports homeownership, but you don’t mind telling some of your clients the American Dream isn’t for them?

You may be able to access funds right now, but you might not be ready to buy a house. You may need to have more money set aside. You may need to pay down some debt. We deal with the totality of the person coming through the door.

I still think it is an American Dream, but it takes work on both sides. We can’t hold your hand and not have you do some work, because what that will do will make it so that you can’t get over the next hurdle. We will be there beside you, and we will be able to help you out. But it takes some work. Just because we say you are not ready right now is not saying that you are not ready for the next 20 years. It is just that we want you to be as successful as possible.

You speak of the new normal, including tighter credit and bigger down payments, that will require homeowners to have greater financial stability. Is this good or bad?

I think the trend of making people more financially stable is good. I think the trend is too far over in terms of access to capital to get a mortgage or being able to fix up your house. That doesn’t mean that we should go back to the days when someone could say they made $100,000 working as a clerk at a department store because they did a lot of overtime and didn’t have to prove it. But it shouldn’t be that you can’t purchase a $100,000 house without putting 20 percent down.

How do you increase financial literacy to deal with the new normal?

We look at it as an issue of financial acuity — being able to see clearly. When we put together people’s budgets [in the group’s various programs], we saw that there is all this personal economic leakage. Financial acuity is a matter of looking at the full budget of someone and saying that if you have a limit on what the inflow is going to be, we need to work on the outflow. If we do that we can get you to the American Dream of homeownership and to the point where you have some savings. So when the dryer breaks, you’ll be able to fix it.

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