Philadelphia Bank Foreclosures Contained by Various Programs

by Donald Hanz on cities

Philadelphia bank foreclosures have not increased in number as fast as in other cities because of various programs launched by the city and the state of Pennsylvania, in addition to the federal loan modification and refinancing programs.

In the nationwide foreclosure report released this week by an online research firm, Pennsylvania ranked low in the foreclosure rate chart for the third quarter this year. While the worst affected state, Nevada, has one out of every 23 households in default or foreclosure, Pennsylvania has one in every 387 units in default or foreclosure.

The state was 34th in the chart, with only 14,167 households receiving default or foreclosure postings in the third quarter, including 3,973 bank-repossessed units.

One of the programs that have successfully helped control the rise in foreclosures in Philadelphia is the Philadelphia Unemployment Project, which was launched in April 2008. This program has helped approximately 1,400 families to save their homes from foreclosure by delaying sheriff’s sales so distressed homeowners can negotiate with their lenders for lower monthly payments in sessions supervised by the court.

Pamela Kennebrew, a counselor working with the project, said she has received a lot of cards from homeowners thanking her and the project for helping them keep their homes.

Terry Gillen, meanwhile, who works as an adviser to Philadelphia Mayor Michael Nutter, said that the program is small compared to the breadth of Philadelphia bank foreclosures, but if 1,400 families so far were saved from the streets, then the program is already a success.

Now, John Dodds, head of the Philadelphia project, is focusing more on helping unemployed homeowners. He has been campaigning for the provision of direct loans to unemployed homeowners. He reiterated that many of the 7.2 million workers who were laid off since the beginning of the crisis have also lost their homes and those who have been able to continue paying will soon lose theirs too if there is no significant intervention from the government.

Another program that has been helping contain foreclosures in the city is the mandatory mediation program, which was even used as a model for foreclosure prevention in other cities. This program was carried out in partnership with nonprofits whose counselors went from door to door to distribute flyers about the program and reach out to distressed homeowners.