Local officials address foreclosure crisis

09/17/07 Mitch E. Perry
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As the subprime mortgage crisis reaches deeper into the U.S. economy, Tampa congresswoman Kathy Castor and officials from neighborhood associations spoke this morning about the escalating mortgage foreclosure crises, and what can be done to help those in danger of losing their homes.

The message Castor and others wanted to deliver for homeowners in trouble is, they can get assistance in restructuring their loans, to ensure that they keep their homes.

Last month, East Tampa resident Isaline Wyatt was about to lose her home to foreclosure. She said she reached out members of her church about her situation, and ultimately ending up calling the Hope Ownership Preservation Hotline, a nationwide nonprofit which creates partnerships with local governments, borrowers and lenders.

Toni Watts is the CEO with the Corporation to Develop Communities of Tampa (CDC). She said the key to making sure that groups like hers can help out those facing foreclosure is to seek help as soon as it’s apparent that it’s needed.

But Askiya Akeal, who works in a similar role with the St. Petersburg Neighborhood Housing Service, says there isn’t much they can do to for some people.

Among the factors that have led to the rise of subprime mortgage foreclosures include adjustable rate mortgages with steep built-in rate and payment increases, prepayment penalties and limited income documentation.

Data collected late last year from the Home Mortgage Disclosure Act showed that black and Latino homeowners have taken out a disproportionate share of subprime loans. Many received such loans from what Rep. Castor calls “fly by night" companies.

Doug McCree is director of First Housing Corp. He echoed Castor’s comments. As soon as a homeowner realizes they are in trouble they should contact their lender.

Castor says there are various remedies being considered in Congress to alleviate the subprime mortgage crisis, including a bill to broaden the eligibility criteria for the Federal Housing Administration loans. Other Legislation being considered would create an affordable Housing Trust Fund.

In the Senate, New York Democrat Charles Schumer say he is preparing legislation that would increase capacity space to refinancings of subprime loans.

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