It’s no secret that the nationwide mortgage crisis has hit Ohio hard.

Last year, foreclosure filings went up 10.4 percent in Lorain County and 20.2 percent in Medina County and increased statewide by
3.8 percent.

So when President Barack Obama’s administration announced Friday that Ohio wasn’t included in a five-state, $1.5 billion foreclosure relief plan, representatives of consumer counseling networks and housing advocates were stunned and called for Ohio to receive help, too.
Arizona, California, Florida, Michigan and Nevada each will receive an average of $300 million from the Troubled Asset Relief Program earmarked for the foreclosure crisis.

“We ought to blast the administration and say, ‘How can you do this?’ ” said Suzanne Gravette Acker, spokeswoman for the Coalition on Homelessness and Housing in Ohio. “We have had record foreclosures for 14 years, and I challenge any state to say they had more in a row.”

According to the federal Home Affordable Modification Program report, the administration drew the line on which states to fund by using the 60-days-or-more delinquency rates.

The five states selected for additional help had 60-day delinquency rates higher than 12.5 percent, while Ohio’s fourth-quarter delinquency rate was 11.5 percent.

Existing funding for consumer counseling also is expected to be cut, although how much is unclear, according to Mark Seifert, executive director of Empowering & Strengthening Ohio’s People.

ESOP received $1.7 million in 2009, but could receive as little as $568,000 this year, Seifert said Friday.

“Lorain County’s office is potentially on the chopping block,” Seifert said.

Seifert said ESOP’s office at 1850 Washington Ave. in Lorain has the equivalent of 1½ employees and assisted about 400 people last year. Overall, ESOP has 60 employees in 11 offices and helped about 7,000 homeowners in 2009, with an 83 percent success rate, he said.

Seifert said his employees practice “tough love,” counseling people to replace $200-a-month cell phone costs with $19.95 land lines or eliminate extras like fancy cars.

“We know a lot of people who come to us are not angels, but the price of stupidity should not be homelessness,” Seifert said. “We bailed out Wall Street overnight. When does Main Street get help?”

Seifert said the problem with HAMP — the federal program to help delinquent homeowners — is that it can take as many as four or five letters to prompt lenders to supply needed documentation. That is where savvy loan counselors from ESOP can help, he said.

Acker said another problem is that HAMP participation by lenders is voluntary.

Without assistance, Seifert predicted a failure rate of 80 to 90 percent of those people trying to take advantage of the federal help.

In Ohio, legislators are trying to expand the use of mediation between lenders and delinquent homeowners through Ohio Senate Bill 197, but homeowners will lose their mediations if they are not prepared, Seifert said.

Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, called the HAMP program “a major bust.”

The $75 billion program has operated for a year and helped just 116,000 homeowners nationally, he said. In Ohio, 2,529 homeowners got a permanent modification to their mortgage, Faith said.

Meanwhile, homeowner prevention counseling, which is a proven strategy to reduce foreclosures, has been cut nationally by two-thirds, Faith said. Counseling dollars went from $180 million last year to $65 million this year.

Statewide, foreclosures jumped by 20 percent or more last year in 18 counties, according to figures compiled by the Ohio Supreme Court.

Contact Cindy Leise at 329-7245 or cleise@chroniclet.com.

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