Philadelphia Unemployment Project in four parts

If you guys are curious about PUP, here's a little video an intern put together for us. This is the first part, which captures a clip from a rally we did to get a woman access to a hospital. It's the first of four parts.

Part 2 - Unemployment Compensation

Part 3 - Foreclosure Prevention

Part 4 - Workers' Campaigns

Give Loan Modifications a Chance: Philadelphia's innovative plan, for homeowners and for lenders

Judge Darnell Jones anounced an innovative plan to stem foreclosures in Philadelphia Wednesday. Philadelphia homeowners will have a chance to modify the terms of sub-prime and predatory loans so that they can again afford the payments. It's a modification, not a re-finance, which means that they don't have to reapply or accrue new settlement fees. The lender simply agrees to lower the interest rates and change the terms on the existing mortgage. The deal only applies to owner-occuppied residences. It also only applies if the owner-occupant takes advantage of the court-mandated opportunity to meet with attorneys for their lender within 45 days of the foreclosure filing. If they don't, foreclosure will proceed like it always does.

In Harold Brubaker's story on the deal in yesterday's Business Section of the Inquirer, Tobi Walker of the Pew Charitable Trusts said, "This is one of the more innovative approaches we've seen."

The situation for lenders has been bad enough that they have been willing to pursue modifications with homeowners, but the process has been so cumbersome that many homeowners have still lost their homes because the foreclosure moved faster than lenders' workout staff could get through the volume of cases. Philadelphia advocates had a key insight: we have a large workforce of housing counselors available and willing to manage the lion's share of the modification process, if only the lenders would agree to give them that authority. Now, the court is requiring it.

Common Please Court has made this happen procedurally. It now simply requires lenders to give homeowners the opportunity to modify loans before permitting a foreclosure to go forward in court. There's no case or decision to look up. The court has simply changed the way it conducts the business of foreclosure.

Here's how it happened: late last year The Philadelphia Unemployment Project began calling Philadelphians holding mortgages through Countrywide. We invited them to meet as a group with our housing counselors, discuss their options as individuals and ask them to join with us as a group to press for a better deal through our Foreclosure Crisis Committee. Then, in December, the Save Our Homes Coalition convened in the PUP offices. Community Legal Services, ACORN, Philadelphia Legal Assistance and various Housing Counseling Agencies from around the city.

Meanwhile, the whole economy began teetering badly as the collective misjudgement of America's housing market by the world financial industry became apparent. Click read more to find out the rest of the story.

Hope Now isn't cause for much hope

New York Times photo of PUP members demonstrating at HOPE NOW event.

In case you aren't quite convinced to follow Dan's suggestion, above, to call Specter, here's a little back-up for him. This whole industry friendly foo-fah going on with the Hope Now Alliance is not cause for much hope. We need something stronger. Yesterday, PUP did an informational picket outside a HOPE NOW event.

In our press release, John Dodds, Director of the Philadelphia Unemployment Project, explained: “With sub prime loans increasing dramatically in Philadelphia in the past three years from 20% in 2004 to 37% in 2006 we need more than a public relations road show to protect families and neighborhoods from this crisis."

Hope Now Alliance Hotline has gained a reputation for causing frustration and minimal help to large numbers of homeowners trying to use their services. The Alliance is heavily dominated by the mortgage industry.

“They didn’t even reach out for local housing counselors until this Tuesday for a large scale event a week away”, said Pam Kennebrew a housing counselor for the Unemployment Information Center. “The phone number for the flyer they sent to local homeowners had a bad phone number to call to get information on the Homeownership Forum. A woman in Las Vegas was getting the calls.”

ABC-6 video report on Hope Now Alliance event in University City on April Fool's Day.

Action News reporter Nydia Han covered the Foreclosure Crisis Committees informational picket. As she reports, no homeowners left the meeting with modified loans.

Pass Cover All Pennsylvanians: our visit to the Northeast

(Philadelphia - 3/4/08) - Outside the City of Philadelphia's Neighborhood Health Center #10 Tuesday, Philadelphia leaders gathered to call on the Northeast House Delegation to support Cover All Pennsylvanians [CAP]. "As a person working without insurance, I'm at risk every day of losing my job because of an injury or sickness whose care I won't be able to pay for," said, Andre Butler, Chair of the Philadelphia Unemployment Project Board and member of the Health Center #10 Community Board.

Speaking through a representative, Deputy Mayor for Health and Opportunity, Don Schwarz, MD, said in a written statement, "It is for this and many other reasons that I am standing with you all today, as health care is being debated in Harrisburg, to affirm my support for CAP, Cover All Pennsylvanians, a proposed health insurance package that would prove health insurance to the uninsured in Pennsylvania."

A hearing of the State House of Representatives Appropriations Committee considered the benefits and funding sources for CAP this afternoon. CAP would cover doctor visits, tests, hospitals stays and prescriptions. Most of the funding would come from existing pools, with a slight increase in tobacco taxes covering the rest. A vote on CAP and reforms in the small group insurance market is expected in the State House next week.

Subprime Lending in Philly: Same Old, Same Old

Today the Federal Reserve cut interest rates by .75 of a percentage point. Everywhere you look, the subprime lending crisis appears to be hurtling the US into a recession. Newspaper stories talk about cities having to deal with epidemics of foreclosures. While all of this is true, the whole thing is a useful exercise in looking at where the media priorities of the big national newspapers lie. Because, while cities across the Country are certainly experiencing high levels of foreclosures, in reality, they are not much higher than they have been for years. In other words, yeah, subprime lending is hurting us, but, it has been hurting us for plenty long before now.

One way to measure foreclosures is to look at foreclosure filings per 1000 owner-occupied homes.

These are the rates of foreclosure in Philly per 1000 owner-occupied homes (2000-2003 numbers here):

2000: 14.6
2001: 17.1
2002: 18.2
2003: 18.1
2004: 16.1
2005: 15.9
2006: 16.4

I don't have 2007 numbers, but, I suspect they will not be higher than 2002-2003, when the wild-wild west world of 1998-99 loans were all coming through the foreclosure pipeline. Does that mean Philly is not hurting? Certainly not. But simply, it is nothing new. For example, in 2005, I rode around Philly with a reporter who wrote this:

PHILADELPHIA -- To walk Thayer Street in northeast Philadelphia is to count, door by door, the economic devastation afflicting a working-class neighborhood. On a single block, 18 of the 42 brick rowhouses have gone into foreclosure in the past three years.

There's Marciela Perez, who fell ill with cancer, lacked health insurance and stopped making mortgage payments. Barrel-chested Richard Hidalgo, who got divorced and could no longer make his monthly nut. And Mike O'Mara, a rawboned and crew-cut truck driver who took on too much debt, lost his job and fell behind on his mortgage.

"Mortgage companies convinced us to refinance, and each time our bill went up," O'Mara said as he surveyed his narrow street from his shaded front porch. "You fall behind and they swoop down on you."

Philadelphia, its suburbs and indeed much of Pennsylvania have experienced a foreclosure epidemic as low-income homeowners take on mortgage debt they cannot afford. In 2000, the Philadelphia sheriff auctioned 300 to 400 foreclosed properties a month; now he handles more than 1,000 a month. Allegheny County, which includes Pittsburgh, had record auctions of foreclosed homes, and officials speak of a "Depression-era" problem. The foreclosures fall particularly hard on black and Latino families.

In a TRF study on Predatory Lending (full disclosure: I worked on both reports), for example, one neighborhood that was closely examined- Harrowgate- had about 173 foreclosures per 1000 owner-occupied properties for the years 2000-2003. To me, at least, that is a stunning amount of foreclosures, and we are talking about a time period from up to eight years ago.

Because of the advocacy community in Philly- groups like PUP, CLS, ACORN, etc., because of a progressive minded Secretary of Banking under Rendell, because of having TRF located in Philly, because of the Daily News and Marian Tasco taking on predatory lending in... 2001, this really, truly, is nothing new. Yet, to read the New York Times, this phenomenon is like nothing before.

Part of this is that the pain of subprime lending is reaching new communities, and that the Wall Street house of cards is falling, so it is having a more mainstream effect. However, even that could have been forecasted, considering that it has long been routine for the biggest subprime lenders to go out of business after ravaging communities. The difference now is that mainstream lenders- Countrywide, Citi, etc., and mainstream investors- Bear Sterns, Morgan Stanley, etc have woven themselves deep enough into the morass, that just about everyone is paying attention.

However, for the average Philadelphian, has much changed? No. The crisis that we had before is the same crisis we have now. The only difference is now, the national media is 100 percent fixed on the problem.

But, Philly still has a great predatory lending bill on the books. All that would have to happen for it to take effect would be for Dwight Evans and Vince Fumo to undo Act 55- the State preemption bill. What do you say, fellas? Want to undo some of the damage you wrought?

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