Norfolk aims to stop foreclosures through intervention

NORFOLk

From half-million dollar houses in Ghent to condos in Ocean View to one-story homes in Meadowbrook Terrace, foreclosure has hit just about every neighborhood in Norfolk.

And it's become a growing problem.

One in every 720 city houses was in some stage of foreclosure in May. While that compared favorably to a statewide average of one in every 669 homes, RealtyTrac Inc., a company that monitors foreclosures nationwide, says Norfolk's foreclosure rate is the worst in Hampton Roads.

In response, the city this month created a Foreclosure Intervention Network to help local homeowners who are facing a financial crunch.

"Even though we're not in a crisis situation, it's still something we need to pay attention to," said Acquanetta Ellis, Norfolk's assistant director for planning and community development. "We feel as though we can find those families that are struggling, who are just barely making it, and help them through this period."

The effort puts Norfolk in the forefront of Virginia's attempts to stem the rising tide of foreclosures. A state Foreclosure Prevention Task Force began meeting in December, and last month, Fairfax County's Board of Supervisors announced a three-pronged program designed to help homeowners in need.

No other city in Hampton Roads has an effort aimed specifically at foreclosures, although some, such as Virginia Beach, offer one-time assistance to property owners who prove an ongoing ability to make mortgage payments.

"It's very proactive on the part of the city to take this step," said David Smith, the state's deputy secretary of commerce and trade, who has worked closely with Virginia's foreclosure task force. "I suspect more will follow as this becomes a more localized problem."

The network is composed of the city's housing department, Norfolk Redevelopment and Housing Authority's HomeNet Homeownership program and the regional non profit Up Center, which provides home ownership counseling.

The network started up only two weeks ago. It will host a seminar early in September for people who are 30 days or less delinquent on their mortgage loans.

The program will look at how homeowners can access some of the help offered through the federal housing bill signed by President Bush on Wednesday.

Later seminars will teach people how to buy foreclosed properties, in the hopes of getting houses reoccupied and back on the tax rolls.

"We don't want empty houses," Ellis said. "A lot of what we're doing is really trying to help our neighborhoods."

John Allen, the vice president of the Up Center, said he and Ellis started talking about the idea because his agency has been awash in people needing foreclosure help.

Starting early in 2006, the Up Center saw about a threefold increase in people seeking help because they were behind on mortgage payments, he said.

At that time, most of them had received loans that far exceeded their ability to pay. Allen said the numbers of

homeowners needing assistance has stayed high - about 30 or 40 come to the Up Center each month - but the majority now are people who have seen their finances crunched by rising gas and food prices or the loss of a job.

Smith reported that the statewide task force received similar reports.

"Daily, we get calls - and some of them really break your heart," Smith said. "It's a desperate situation for those who are in it."

The homeowners are looking for help - financial counseling, advice on working with their lender - and oftentimes are able to renegotiate the terms of their loan and come up with a pay-off plan and budget, Allen said.

It's better to educate people before they buy, Smith and Ellis say.

HomeNet, the Up Center and other regional groups offer six-hour Virginia Housing and Development Authority homeowner classes that Ellis said should become a priority for buyers.

"After this, we're really going to be pushing those classes," Ellis said.

Norfolk's Foreclosure Intervention Network will be focusing on people worried that they could go into default - or those who are less than 30 days behind in payments - because that's the group who can be more successfully bailed out, she said.

She added that they expect a crowd of about 100 at the September seminar.

Smith said homeowners in trouble, however, shouldn't wait until then.

"If you think you're going to have a problem, if you're in the midst of a problem, you need to start having a dialogue with your lender right this minute," Smith said. "Sitting back and doing nothing is not an answer."

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com