by Mike Sharkey
According to Forbes Magazine, Jacksonville will be the foreclosure capital of the nation next year. City Council member Kevin Hyde would like to see what the City, and the courts, can to to prevent that dubious prediction from coming true.
“In this area, there are 4,800 this year. It’s a staggering number,” said Hyde.
According to Hyde, one in every 10 homeowners is behind on their mortgage payments and one in every 157 is in foreclosure. And, they aren’t all Downtown or on the Northside or on the Westside. Hyde says that “for sale” sign in Ortega or Queen’s Harbour or on San Jose Boulevard may be someone looking to sell and either move or upgrade. Or not.
“It (foreclosure) is not isolated geographically to any particular area of town,” he said. “If you see a for sale sign, they may be in foreclosure. It’s not income specific.”
While last night may have been the last Council meeting of the calendar year, Hyde said he’ll work over the holidays on legislation that can address the foreclosure issue locally. There are state and federal programs, but after hosting a foreclosure summit last month with fellow Council member Jack Webb — both are attorneys — several area bankers, housing officials and attorneys from both the private sector and Jacksonville Area Legal Aid, Hyde is convinced something has to be done locally to help those either facing or deep into foreclosure.
“It creates three problems,” said Hyde, an attorney with Foley & Lardner. “One, there is the displacement of people and the social costs. Two, it creates blighted, distressed areas. Three, it affects the tax value.”
During the summit, Director of Housing and Neighborhoods Wight Greger said there is $26.2 million in federal money coming to Jacksonville. However, those funds are for the Housing and Urban Development’s Neighborhood Stabilization Program and not to help prevent foreclosure or assist those in foreclosure. Gregor said the City requires anyone who seeks City assistance through Jacksonville Area Legal Aid to first go through financial counseling. Many don’t make the commitment and forego the process.
With little to no state or federal assistance, Hyde is left to battle the issue locally. He has asked attorneys Chip Parker and Jim Kowalski to help draft a bill that he’d like to introduce at the first Council meeting in January.
“We can’t tell local lenders what to do and we can’t tell the courts what to do,” said Hyde. “But, we can encourage some things.”
What Hyde would like to see locally is mandatory mediation before a foreclosure situation reaches the point of no return for both the lender and the borrower. He’d also like it required that when the borrower is served the notice of foreclosure, that notice contain information on services and financial assistance available to avoid final foreclosure.
Hyde said within three months he’d like to have “tangible legislation” for the Council standing committees to consider and something on the books in six months. He says it’ll still take a year to 18 months to see if the legislation is having a positive effect.
Another option is one used in other circuits and that’s a foreclosure court. Locally, on the federal level Judge Jerry Funk hears bankruptcy cases, of which there may be a foreclosure element. Hyde said he’d like to see a couple of judges in the Fourth Judicial Circuit become foreclosure experts in the same manner Circuit Court Judge David Gooding has become an expert on adoptions.
From the financial perspective, Hyde said the banks are open to just about anything that will keep people in their homes.
“The last thing the banks want is foreclosed property,” he said. “They have been very cooperative.”
With foreclosures up a whopping 70-plus percent nationally from November of 2007 to November of this year, Hyde said the days of the exotic loan are gone. Banks won’t go for them and mortgage brokers wouldn’t dream of asking for a loan for someone with questionable credit, a part-time job if any at all and nothing to put down — on a $350,000 house.
“There is enough blame to be spread around. We got away from the traditional requirements of what people were historically expected to do to get a loan,” said Hyde. “The banks will look for real money down, a real fixed interest rate and real terms.”