ELYRIA — Ohio Treasurer Richard Cordray calls it one of the greatest threats of our generation, while U.S. Treasurer Anna Escobedo Cabral says the threat will only grow astronomically if we don’t act now.

Added Doug Shelby, Cleveland’s Housing and Urban Development director: “It’s going to take a lot of us working together to get our arms around this little monster.”

That monster, so to speak, is the rising rate of foreclosures across the country.

That was the topic at hand Thursday at the Elyria Holiday Inn when nearly 200 community and industry leaders gathered to hear Cordray and Escobedo Cabral hammer the sad realities of a national foreclosure crisis.

What we’re talking about are people’s lives, their homes, where they feel secure,” Escobedo Cabral said. “It’s about quality of life for individuals. It will not only take a toll on families, it will affect their neighbors and neighborhoods.”

The two-hour luncheon was organized by South-Elyria Neighborhood Development, and the record crowd that showed up was a giant leap from two luncheons SEND hosted in previous months, SEND Director Chris Baker said.

Attendees included people whose neighborhoods and occupations feel the ripples from foreclosure: city officials from Elyria and Lorain, county officials, the county sheriff, school administrators, banking and real estate professionals, nonprofit representatives and more.

Rich Nielsen, Elyria Schools’ business manager, said school districts are affected by foreclosures as they’re required to provide transportation and special arrangements for students whose families were ousted from their homes.

“We help them not just because we’re required to, but because it’s the right thing to do,” said Nielsen, who attended Thursday’s SEND luncheon.

Elyria Mayor Bill Grace said the problem is apparent throughout Lorain County.

“Many people are losing their homes and many are just making ends meet, and they’re still struggling in a dramatic way,” Grace said. “It’s important that solutions are found … and financial institutions work with homeowners to find mutually beneficial ways through all this.”

Cordray and Escobedo Cabral both said there needs to be more reconciliation between mortgage lenders and homeowners who are at risk of losing homes because of sub-prime or exotic loans, and the cooperation has to start at a local level. 

Cordray, a former Franklin County treasurer, said he first noticed the problem years ago when he was in Franklin County.

“Mortgage lending practices have changed dramatically over the years,” he said, adding that the U.S. hasn’t endured so many foreclosures since the Great Depression.

Cordray said that unlike the Depression-era foreclosures — fueled by unemployment and a rock-bottom economy — today’s crisis has been triggered by a loosening of the strict standards that governed mortgage loans, and the purchase of too many homes using adjustable-rate mortgages, meaning initial low payments can skyrocket beyond the homeowner’s ability to pay. Cordray and Escobedo Cabral agreed the foreclosure crisis needs answers, though their plans of attack differed.

Cordray stressed a need for government pressure on lenders and other parties to remedy the problem, while Escobedo Cabral placed greater emphasis on self-reliance and educating homeowners on predatory lending schemes. Cordray said state educators are trying to make mortgage lending a greater part of high school curriculums in hopes of educating youngsters so the problem can be skirted in the future.

Escobedo Cabral said many homeowners simply ignore their mail or don’t bother contacting lenders when they think they’re reaching a crisis stage with their mortgage.

As a solution, she said the federal government is pursuing numerous programs and legislation that could not only educate homeowners but place pressure on the lending industry. Among the solutions: A nationwide mailing campaign to homeowners. 
Cordray’s spokeswoman, Holly Hollingsworth, said Cordray appeared at the luncheon Thursday not only to speak to locals, but also to appeal to Escobedo Cabral for more federal involvement in the foreclosure crisis.

“We feel welcome to be here, but we’re also saying we need more help for Ohio,” Hollingsworth said. “We need more action steps.”
Cordray said Gov. Ted Strickland has outlined specific actions that could sink some teeth into the foreclosure crisis, though he fears any proposed federal legislation could override the state’s efforts.  Escobedo Cabral said more than 2.2 million home loans obtained from 2004 to 2006 will see rates adjust in the next 18 to 24 months, which could mean more foreclosures on the horizon as payments rise.

Contact Shawn Foucher at 653-6255 or sfoucher@chroniclet.com.

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