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Do IT this week: Layering
Loss in Akron area is put at $45 million
By Rick Armon Beacon Journal staff writer
Published on Tuesday, Oct 23, 2007
The rising number of foreclosures in the Akron area is affecting more than just individual homeowners and mortgage lenders, according to a report released today. Local governments and people living near foreclosed homes also are paying the price.
The Association of Community Organizations for Reform Now, better known as ACORN, estimated that 619 loans made last year in the Akron area will probably go into foreclosure at a cost of more than $45 million.
The group analyzed data from private and federal sources to predict the economic impact of foreclosures in 96 metro regions. The national losses could exceed $25 billion, according to the report, Foreclosure Exposure 2: The Cost to Our Cities and Neighborhoods.
In the Akron metropolitan statistical area which is designated as Summit and Portage counties homeowners are expected to lose $4.4 million, while lenders and investors could lose $15.7 million.
Local governments and neighbors may lose an additional $11.9 million and $13 million, respectively, in property taxes and housing values, the report said.
''It's not just the individual homeowner who's losing here,'' said Liz Wolff, national research director for ACORN.
The group is lobbying for mortgage reform and pushing for lenders to modify adjustable rate mortgages into affordable, fixed-rate loans to prevent the decay of heavily affected neighborhoods. Many urban and minority communities are being hit the hardest, the report said.
The solution is not rescuing the banks, Wolff said.
''We should be bailing out the regular people and not the financial institutions that gave out these silly loans in the first place,'' she said.
ACORN issued similar reports for other urban areas in Ohio. The Cleveland and Cincinnati areas tied with a projected loss of $140 million, followed by Columbus ($115 million), Dayton ($60 million) and Toledo ($34 million).
Government and community groups need to do a better job educating the public about how the financial losses affect schools and city services, experts said.
''Foreclosure is everyone's problem,'' said Kimberly Zurz, director of the Ohio Department of Commerce. She chaired the state task force on foreclosures earlier this year. ''It's just not the guy facing the situation. It's the guy next door. It's the guy across the street. It's the bank. It's the school. It is going to impact everyone one way or another.''
Toree Stokes, chief executive of the Mustard Seed Development Center, a nonprofit agency in Akron that counsels people on home ownership, said she wasn't shocked by ACORN's $45 million figure for the Akron area. But the estimated losses for local governments and neighbors were unexpected.
''When the community starts getting impacted like that, that's surprising for me,'' Stokes said.
The Akron area tied with Austin, Texas, last year for the 16th-highest home-foreclosure rate in the country, according to an earlier ACORN report. Summit County ranked fifth in the state last year in the number of new foreclosure filings at 4,833.
Officials expect the number to continue growing and surpass 5,000 this year.
The community needs to offer more help to people falling into foreclosure, but there is a lack of financial assistance available, Stokes said.
''Everybody wants to provide education and everybody thinks we need to offer financial assistance to the homeowners, but we as a community need to collaborate to draw in the funding sources to be able to do that,'' she said.
Zurz said the state is setting aside $2 million for counseling and $1 million for demolition of blighted foreclosed properties.
For details about ACORN or its latest report, go to http://acorn.org.
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.
The rising number of foreclosures in the Akron area is affecting more than just individual homeowners and mortgage lenders, according to a report released today. Local governments and people living near foreclosed homes also are paying the price.
Get the full article here.
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