Press Releases

Buoyed by Good Data Analysis, Delaware Can Move Forward to Tackle Foreclosure Problems

July 21, 2006

With concerns about a rising trend in foreclosures, Delaware sought the outside perspective, expertise and analysis of TRF, a socially-minded investment group which also provides housing policy research services. With analysis and recommendations now in hand, the State is quickly moving to take action to tackle rising foreclosures.

According to State Rep. Helene Keeley (D-Wilmington South) who has provided the legislative leadership on this issue, “Delaware hired TRF to research and analyze foreclosure data and make recommendations on how to improve the situation. Our state has a high rate of homeownership, so the climbing rate made us concerned about people who were unable to maintain their homes and particularly concerned about what lies before us as rates rise and appreciation slows” Keeley stated.

TRF found that foreclosures were fairly concentrated in particular zip codes and that a surprising number of those who go into foreclosure do so multiple times. Maggie McCullough, TRF’s Deputy Policy Director explains that “many Delaware homeowners went in and out of foreclosure more than once from 2000 to 2005. Although the number of foreclosure filings increased by 52%, the increase in number of properties foreclosed on went up by 23.6%. While just more than ½ of the owner-occupied housing units are in New Castle County, ¾ of the foreclosures occurred in that county. These foreclosures are particularly concentrated in areas with significantly higher percentages of African-American households.

As a tough reminder of the true impact of foreclosure, TRF estimates that 46% of the 9,385 Delaware households who faced foreclosure between 2000 and 2005 have lost or sold their home as a result.

State Representative Helene Keeley has worked with others to launch appropriate responses. She explained “it was just a year ago that I started getting calls from constituents regarding sheriff sales. This analysis has convinced me that we had a lot of opportunity to improve consumer education.”

TRF has recommended targeting areas of high rates with information and prevention resources, supplemental training to housing counselors, and creation of a pool of emergency funds for homeowners in trouble, like Pennsylvania’s highly effective Homeowner’s Emergency Mortgage Assistance Program (HEMAP). “With such a concentrated problem, the most efficient approach is to focus on those residents who keep finding themselves in foreclosure and educate them about dangers of loans and smart routes to avoiding foreclosure” says McCullough.

Sandy Johnson, Director of the Delaware State Housing Authority concurs. “In Delaware, we can almost touch each neighborhood that we now know is problematic to help homeowners avoid foreclosure. We are launching radio, print and TV ads, brochures, door-to-door outreach, and community meetings, all supported by the Homeownership Preservation Foundation’s 1-888-995-HOPE hotline.” Last month alone, the foreclosure prevention counseling hotline received more than 200 calls from Delaware residents. The State Housing Authority, the Office of the Banking Commissioner, the Attorney General, the Homeownership Preservation Foundation and NeighborWorks Center for Foreclosure Solutions are working in partnership, with the backbone of the effort being the Federation of State Housing Counselors who meet directly with consumers.

Drawing on a variety of state and municipal resources, Delaware has also identified funding to pilot an emergency mortgage assistance program, like Pennsylvania’s, for those zip codes with the highest rates of foreclosure.

A settlement with Ameriquest has provided initial funding for the consumer education initiative.

Download the full report.

For more information about Delaware ’s consumer education campaign including consumer education workshops scheduled for August 1, see the Bank Commissioners’ website at http://www.state.de.us/bank/services/conedu/toc.shtml or call Deputy Commissioner Gerard W. Kelly at 302-577-5092 or 302-547-0800.

About TRF: Combining expert knowledge with innovation and determination, TRF identifies the point of impact where capital can deliver its greatest financial and social return. TRF’s investments in homes, schools, and businesses reclaim and transform neighborhoods — driving economic growth and improving lives throughout the Mid-Atlantic.

Since its inception in 1985 TRF has made $500 million in community investments. These investments have resulted in over 11,800 housing units and 4.3 million square feet of commercial space, 28,300 jobs and 250 businesses, 14,900 charter school slots, and 760,000 MWh of clean, renewable energy – enough to power 80,000 homes for a year.

TRF’s Policy Group, TRF’s in-house research and policy analysis division, has become a highly regarded source of unbiased information for public officials and private investors.

About The Homeownership Preservation Foundation: The Homeownership Preservation Foundation is a Minneapolis-based 501(c)(3) nonprofit dedicated to reducing foreclosures and preserving homeownership for American homeowners. The Foundation was founded in September 2004 with a $20 million seed contribution from GMAC-RFC, a subsidiary of Residential Capital Corporation, one of the nation’s largest real estate finance companies. The Foundation partners with city, county and state governments; federal government agencies; community-based non-profit organizations; and mortgage companies to offer creative solutions to preserve home ownership, and manages a foreclosure counseling hotline at 888-995-HOPE. For more information about the Homeownership Preservation Foundation, please visit www.hpfonline.org or our homeowner counseling website at www.995HOPE.org.

The NeighborWorks Center for Foreclosure Solutions is an initiative of NeighborWorks America , a nonprofit dedicated to revitalizing communities across the nation. The NeighborWorks network consists of more than 245 organizations working in more than 4,400 urban, suburban and rural communities. In the last five years alone, NeighborWorks organizations have generated more than $10 billion in reinvestment and helped more than 780,000 families purchase or improve their homes or secure safe, decent rental housing.

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Press Releases

Buoyed by Good Data Analysis, Delaware Can Move Forward to Tackle Foreclosure Problems