City's lauded foreclosure-prevention program marks its fifth birthday

"Because of this program, I am still in my home," said Fred Brinkley Jr. He shakes hands with Common Pleas Court Judge Annette Rizzo, who oversees conciliation conferences between lenders and borrowers.
"Because of this program, I am still in my home," said Fred Brinkley Jr. He shakes hands with Common Pleas Court Judge Annette Rizzo, who oversees conciliation conferences between lenders and borrowers. (AKIRA SUWA / Staff Photographer)
Posted: June 14, 2013

Philadelphia resident Fred Brinkley Sr. drove a tractor-trailer for 10 years before a car accident injured him so badly he couldn't work. Waiting for his disability claim to be processed, he fell behind on his mortgage payments and faced losing his house to foreclosure.

For help, Brinkley turned to the city's mortgage foreclosure prevention program.

With the help of counseling through Center in the Park in Germantown, he is set to sign papers Thursday for a loan from Pennsylvania's Homeowners' Emergency Mortgage Assistance Program to help him get current on his loan and avert foreclosure.

"Because of this program, I am still in my home, and I will remain in my home. . . . Thank you," Brinkley told a standing-room-only crowd in City Hall Courtroom 676.

He is one of 5,755 Philadelphians who have averted foreclosure thanks to the city's program, which observed its fifth anniversary Wednesday in a boisterous celebration in the courtroom described as its nerve center.

"This program has opened the door to people ready to step up and help themselves," said Common Pleas Court Judge Annette Rizzo, who spends every Thursday overseeing scores of conciliation conferences between borrowers and lenders "working out sustainable deals face-to-face."

It "is a story of effective case management of an ever-increasing workload to stabilize neighborhoods, as well as an action plan to prevent homelessness," the judge said.

In April 2008, the First Judicial District ordered no owner-occupied residential property in Philadelphia foreclosed on without a court-supervised conciliation process between owner and lender.

The city funded outreach to homeowners, a hotline, housing counseling, and legal assistance, spending $17 million since the program's inception, said Deborah McColloch, director of the Office of Housing and Community Development.

The data affirm the program's effectiveness, said Ira Goldstein, president for policy solutions of the Reinvestment Fund, who has collected information on every case.

"What is most important is that 85 to 88 percent of those who obtained agreements to avert foreclosure are still in their homes 21/2 years after those agreements were signed," Goldstein said.

Philadelphia's program has been copied in other cities and states, something Richard Cordray, director of the federal Consumer Financial Protection Bureau, who attended Wednesday's event, noted in his remarks.

"This program was the first city-sponsored plan in the country to facilitate negotiations between mortgage lenders and struggling homeowners," Cordray said. "And you have clearly made a difference not only here, but in cities across the country that are replicating your program for their citizens."

"The concept is a simple one based in that most wonderful of human attributes: common sense," Cordray said. "It is just that troubled homeowners and lenders should talk, and if they talk, in a supervised setting, they may find solutions to many problems."

Rizzo said the foreclosure crisis uncovered a big need for financial-literacy education. That was the genesis of Tools for Financial Growth, a program funded with a $195,000 grant by PNC Bank and overseen by the city's Housing and Community Development Office.

So far, 1,300 homeowners have completed the three-class sessions, including Alvin Turner of Mount Airy.

Turner almost lost his house when his mortgage payments were recorded incorrectly, causing his lender to believe he was behind on the loan.

"It was if their right arm was operating independently from their left arm," he said.

"I kept my receipts, especially my [payment] confirmation numbers. I recommend everybody do that."


By the Numbers

15,417

Homeowners participating

5,755

Homes saved

2,815

Participating homes sold at sheriff's sale

6,304

Outcomes pending

543

Other

SOURCE: Mortgage Foreclosure Prevention Program


Contact Alan J. Heavens at 215-854-2472, aheavens@phillynews.com or @alheavens at Twitter.

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