Goal is to keep houses occupied

Doing a better job of identifying problems before, during and after the foreclosure process was the top recommendation that emerged from a community gathering yesterday.

The meeting of about 70 bankers, elected and state government officials, and local advocates was conducted by the economic-development action team for CHANGE, a neighborhood advocacy group, and the state banking commissioner, Joseph Smith Jr.

Even as efforts to recycle about 800 foreclosed houses in Forsyth County -- including never-occupied houses and housing lots -- are progressing, officials acknowledge that the challenge is greater than any group can handle on its own.

"We find ourselves with an unacceptable level of foreclosures," said Steven Scroggin, a co-chairman of the action team for CHANGE, which stands for Communities Helping All Neighbors Gain Empowerment.

The banking commission said that foreclosures could rise as much as 20 percent in the state this year, primarily from home­owners unable to financially overcome a lost job, an illness or a divorce.

Many foreclosures from 2005 to 2008 came from subprime mortgage loans and homeowners who couldn't adapt when their adjustable-rate mortgage increased. Subprime loans are directed at people who do not qualify for lower interest rates through traditional banks or mortgage groups.

"Forsyth County and Winston-Salem appears to have an advantage over other areas in having a high level of government and nonprofit support for these efforts," Smith said.

Economists and local real-estate agents say that banks are becoming more motivated to accept less-than-market value for foreclosed houses that they have held for months or more than a year because more are expected this year.

However, just collecting timely foreclosure data has been challenging, Scroggin said.

When CHANGE, city and county housing officials recently updated their list of foreclosed homes, they discovered that at least 78 properties owned by financial institutions were not included in the Triad Multiple Listing Service.

"The only way the housing market is going to improve is for those foreclosed homes to go on the market," Scroggin said.

Some advocates stressed that more effort needs to go toward preventing a foreclosure.

"When you help these homeowners find stability in their finances, they tend to stay in their home and contribute to the local community in ways that a foreclosed home can't," said Hazel Mack Hillard, an official with Legal Aid of North Carolina.

Kathy Banks, the counseling director for Consumer Credit Counseling Service of Forsyth County, urged lenders to help restore credit to people who have gone through foreclosure for reasons behind their control.

"Otherwise, they'll be suffering for years to come," Banks said.

Last March, the city of Winston-Salem, Forsyth County and Habitat for Humanity of Forsyth County received a combined $4.5 million in federal money to help local residents buy foreclosed houses.

City and county officials are providing up to $20,000 in down payments aimed at up to 75 houses as part of their neighborhood stabilization program. Habitat aims to buy, rehabilitate and sell up to 20 houses. For more information, go to www.myfirsthomewsfc.com.

Dan Kornelis, the director of the county's housing department, said that there have been nearly 400 applicants for the city/county foreclosure effort, of which about 30 are qualified and in the process of identifying a house to buy.

The effort is focused primarily on the rash of foreclosures in the 27107 ZIP code in southeastern Winston-Salem, but Kornelis cautioned that there are pockets of concerns in every area of the city and county.

Dealing with the state's foreclosure crisis has become a top priority of the banking commission, which is co-sponsoring the Web site www.fightncforeclosure.org. In November, the commission proposed allowing homeowners to forestall foreclosure by asking their mortgage servicer for assistance.

Smith recommended that the local effort focus on taking small steps and allowing success in those neighborhoods to build momentum for larger efforts.

"We're looking at foreclosures as a triage effort, concentrating our efforts on those homes that can be saved and trying to lessen the impact on foreclosed families and victims," he said.

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