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By Rick Armon
Beacon Journal staff writer
POSTED: 04:12 p.m. EST, Jan 08, 2009
The Summit County Port Authority will decide by next month whether to issue tax-exempt bonds to support a new, unusual foreclosure prevention program.
''We have to make sure everything checks out and it smells right,'' port Chairman Steven Kasarnich said today at a public hearing at the Akron-Summit County Public Library downtown.
About 50 people — a mix of government and business leaders, and homeowners who have already agreed to participate — showed up to listen, ask questions and comment on the proposal.
American Homeowner Preservation Inc., a new nonprofit company in Cincinnati, has asked the port authority to issue $12.5 million in bonds to fund the program, which involves AHP buying homes and then leasing them back to the homeowners at lower monthly rents so they can avoid foreclosure.
The homeowners then would have the option to rebuy their homes after three years, paying AHP the cost of the home plus a 15 percent fee.
The program would be the first of its kind in the nation, AHP Executive Director Rob Fredericks said.
Many housing and legal experts are skeptical, though, noting that the business model has been used as a foreclosure scam in the past.
But Fredericks said the company has safeguards in place to prevent abuse, including putting the purchase option on the title for the homeowner. Victims of foreclosure will end up as renters anyway, so why not give them a chance to stay in their home and buy it back, he said.
Several people at the hearing said they wanted the port authority to investigate the company thoroughly. Since AHP is new, it has no track record of success and details about its California owners are limited.
Many of those in attendance said they support the effort.
David Blumberg, president and chief executive officer of Blumberg Investments Inc. in Akron, called the idea simple and brilliant, adding that the port authority should approve the request.
''This is a great way to stabilize neighborhoods,'' he said.
The port authority, an economic development agency, would issue the bonds, but not guarantee them. County taxpayers would not be responsible in case of default.
Despite there being no financial liability for the port, agency President Chris Burnham said there is some risk.
''We have a good name to protect,'' he said.
Don Stuver, 65, of Akron, who has signed up for the program, said he wants to see the port approve the bond deal.
''I certainly think that it does sound too good to be true, but it just might work,'' he said. ''What harm is it to try?''
The next regular board meeting for the port is Jan. 20. The board then meets again Feb. 17.
For more details about AHP, call 800-555-1055 or go online to http://www.ahpoh.org.
For more details about the port authority, call 330-762-4776 or go online to http://www.summitportauthority.org.
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.
The Summit County Port Authority will decide by next month whether to issue tax-exempt bonds to support a new, unusual foreclosure prevention program.
''We have to make sure everything checks out and it smells right,'' port Chairman Steven Kasarnich said today at a public hearing at the Akron-Summit County Public Library downtown.
About 50 people — a mix of government and business leaders, and homeowners who have already agreed to participate — showed up to listen, ask questions and comment on the proposal.
American Homeowner Preservation Inc., a new nonprofit company in Cincinnati, has asked the port authority to issue $12.5 million in bonds to fund the program, which involves AHP buying homes and then leasing them back to the homeowners at lower monthly rents so they can avoid foreclosure.
The homeowners then would have the option to rebuy their homes after three years, paying AHP the cost of the home plus a 15 percent fee.
The program would be the first of its kind in the nation, AHP Executive Director Rob Fredericks said.
Many housing and legal experts are skeptical, though, noting that the business model has been used as a foreclosure scam in the past.
But Fredericks said the company has safeguards in place to prevent abuse, including putting the purchase option on the title for the homeowner. Victims of foreclosure will end up as renters anyway, so why not give them a chance to stay in their home and buy it back, he said.
Several people at the hearing said they wanted the port authority to investigate the company thoroughly. Since AHP is new, it has no track record of success and details about its California owners are limited.
Many of those in attendance said they support the effort.
David Blumberg, president and chief executive officer of Blumberg Investments Inc. in Akron, called the idea simple and brilliant, adding that the port authority should approve the request.
''This is a great way to stabilize neighborhoods,'' he said.
The port authority, an economic development agency, would issue the bonds, but not guarantee them. County taxpayers would not be responsible in case of default.
Despite there being no financial liability for the port, agency President Chris Burnham said there is some risk.
''We have a good name to protect,'' he said.
Don Stuver, 65, of Akron, who has signed up for the program, said he wants to see the port approve the bond deal.
''I certainly think that it does sound too good to be true, but it just might work,'' he said. ''What harm is it to try?''
The next regular board meeting for the port is Jan. 20. The board then meets again Feb. 17.
For more details about AHP, call 800-555-1055 or go online to http://www.ahpoh.org.
For more details about the port authority, call 330-762-4776 or go online to http://www.summitportauthority.org.
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.
Comments
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Cuyahoga Falls, Oh
Posted 07:15 PM, 01/08/2009
Thank goodness! I thought I'd missed some horrendous earthquake that had changed certain envrions in Summit County into lakefront property along the Northcoast!
~~~
Welcome to the Summit County Port Authority
Investing in Summit County and Northeast Ohio
The Summit County Port Authority works with executives, economic development professionals, financial professionals, and the business community to bring economic development to Summit County and Northeast Ohio. Our overarching goal is to drive community development and enhance the economy and quality of life in our region.
The Port Authority combines the power of a municipality with business and financial acumen to the mutual benefit of our industry partners and our community. We provide significant funding and trade advantages to businesses expanding or relocating in or near the county. These include:
Economic Development
Fixed-rate Bond Fund Programs
Conduit Financing Programs
Brownfield Reclamation
Foreign-Trade Zone
Industrial and Commercial Park Development
Community Development
~~~
Hm...aside from making bad loans to the likes of Twinsburg(Township)(was it?), and apparently being an unknown entity not only to myself but the mayors of Stow, Hudson & Macedonia, what does the Port Authority do and how much of our tax dollars are they sucking up to do it?
