Recorder says he's stunned
by scope of mortgage problems
Blackshear says he has identified
3,180 high-risk loans made by eight subprime lenders.
By Lisa A. Bernard
Staff Writer
Wednesday, May 30, 2007 DAYTON
Since January, Willis Blackshear has eyeballed countless mortgage documents looking for loans that run the risk of becoming part of Montgomery County's growing foreclosure crisis. Last year, the county had the second highest foreclosure rate in the state — 9.4 for every 1,000 people.
As the county recorder Blackshear's job includes managing mortgage and real estate filings. His work in recent months has left him astounded by the number of local loan agreements that have potentially devastating consequences written in the fine print. "I didn't know it was anywhere near as bad as it is," Blackshear said. "We've only taken a slice of the pie — a small sample of what could be out there."
Blackshear has identified 3,180 high-risk mortgages made by eight subprime lenders between 2004 and March. "We're talking about mortgages that have balloon riders, which may state that five years into the loan the borrower has to come up with the lump sum," he explained. "Another common one is the variable rate loan, where the borrower started out at 6 percent interest rate and over time it could go as high 15 percent."
As early as July, Blackshear said he hopes to begin sending out letters to these residents, informing them of the risks they face and directing them to a host of programs offered by the state and County Corp, a local private, nonprofit development corporation. As the problems within the subprime lending market have emerged, some borrowers have been shocked after reading the fine print of their loan documents, said Jim Martone, County Corp's vice president of housing and administration. "What we're finding out is that some people don't even know that they have an adjustable rate mortgage," he said. "I think what happens is that people are being told they are getting one thing, and at the closing table it's something else, but they just don't pay attention."
Residents directed to County Corp will be entered into a money management program and directed to local lenders who are participating in Ohio's Opportunity Loan Refinance Program. Launched in April by the Ohio Housing Finance Agency, the program is aimed at helping homeowners who are concerned about meeting the terms high-risk mortgages.
For its services, County Corp only charges cost of the credit report, which is between $35 and $45, Martone said. Work is under way to get the program officially approved by Montgomery county commissioners, Blackshear said. Sooner than later, he said, he hopes to open it up to all loans filed with his office. "Even if we find that we've only helped 100 people, in my mind, we succeeded," he said. Safe mortgages Opportunity Loan Refinance Program of the Ohio Housing Finance Agency: Provides qualified borrowers an affordable 30-year, fixed-rate financing alternative to their adjustable rate mortgages. Log on to at www.OhioHome.org for a list of participating lenders. Eligibility is based on credit and household income may not exceed 125 percent of the area median gross income of your county.
In Montgomery County that figure is $74,750. Opportunity Loan also offers a 20-year, fixed-rate second mortgage option at an amount up to 4 percent of the appraised value of the home. The second mortgage may be used for other similar financing charges such as payoff of the first mortgage, including late fees or attorney fees. A minimum of four hours of HUD-approved counseling is required to participate. Proof of education must be provided prior to closing. For a list of available counselors, visit www.hud.gov. OHFA also requires post-purchase counseling in the event a mortgage payment is 30 or more days late. Participants may be reimbursed for out-of-pocket costs paid for appraisal, credit report or up-front hazard insurance payment with appropriate documentation. Mortgage insurance is required for loans that have a greater than 80 percent loan-to-value ratio.
Check out the article at DaytonDailyNews.com
HELP IS ON THE WAY
By Jessica Braydich
Article from the Mongtomery County Democrat's Quarterly Newsletter
TRUEBLUE:
After Judy Dodge, the former Recorder, won election to the County Commission, the Democratic Party appointed Willis E. Blackshear to the office of Montgomery County Recorder. Mr. Blackshear was sworn in on January 5, 2007 as the 33rd Montgomery County Recorder. He is the first African American to hold the position of County Recorder in the State of Ohio.
Mr. Blackshear states that he has trained for twenty years to achieve this office. Even though this position may just be County Recorder to some, it holds greater meaning for Mr. Blackshear, “...I am in a better position, to where I can help people, more people.” That is Mr. Blackshear’s winning quality - he wants to help.
Born and raised in Dayton, Ohio, Mr. Blackshear graduated from Paul Laurence Dunbar High School and went on to Fisk University in Nashville, Tennessee, where he earned his Degree in Political Science and Public Administration. His entrance into the political world came at the insistence of his fourth grade teacher, who said Mr. Blackshear would make a great class president. Mr. Blackshear lost that election, but said it never fazed him, “at that point I knew that one day I would serve the public, and that was the deciding factor in my life…”
His initiation into the Democratic Party was in 1983 when he worked on the presidential campaign for Walter F. Mondale. Mr. Blackshear’s commitment to the Montgomery County Democrats is apparent. He received the Montgomery County Young Democrat’s President Award in 1984, and his early work led to further campaign efforts and then a job opportunity with the Montgomery County Treasurer’s Office. He rose through the ranks in the Treasurer’s Office, ending his career on a high note as Assistant Treasurer in the Delinquent Taxes Department. He has worked not only on local candidate campaigns, but for sixteen years has volunteered his time to the GET OUT THE VOTE movement, he also served on the West Dayton Development Trust Fund Board.
Mr. Blackshear views the Democratic Party as the party in support of the American People, and “I am a Democrat because they identify most with my principals and views.” Mr. Blackshear finds the opportunity to serve as Recorder to be the best thing to happen to him. He will now focus on educating the community on predatory lending, something he is familiar with from working in the Treasurer’s office. “Predatory lending usually isn’t caught until someone’s house is foreclosed on…I want to stop that.” Mr. Blackshear is currently in the midst of discussions with County Commissioners to initiate a program designed to review mortgages and aid victims of predatory lending threatened with losing their homes.
His extensive background in the Treasurer’s Office has given him face to face contact with the people who need help, and first hand knowledge of what predatory lending does to the citizens of Montgomery County. This is just the type of man Mr. Blackshear is; a helper. Continually striving to educate the public, Mr. Blackshear wants to reach out to the younger generation as role model for those interested politics. He wants young people to know that public service is something they can accomplish. He would like them to recognize that putting forth the time and effort can create great opportunities for them within their communities. This aligns with Mr. Blackshear’s vision to be out in the community as a fellow Democrat, a role model for the young, and as our County Recorder.
As the future, Mr. Blackshear says, “My goal is to serve and be the best Recorder I can be.” When asked what he feels everyone should know about our new Recorder, Mr. Blackshear answered, “I will talk to anyone about anything to help them, or direct them to a source with the right answer…you know the saying, Of The People, By the People, For the People? Well, that’s me.”
This is the place to be!
Check out all of Willis' upcoming events:
Under Construction
Please come back!
By Brian Louis
Bloomberg News
Friday, May 18, 2007
Willis Blackshear combs through Ohio mortgage filings, looking for time bombs to defuse.
The Montgomery County official, who oversees real estate filings in Dayton, is searching for loans with balloon payments, or interest rates that may soon rise to unaffordable levels. He has found more than 3,100 in Montgomery, which had one of the highest foreclosure rates in the state last year.
"It's crazy," Blackshear said. "I knew it was bad, but I didn't know it was this bad."
The worst housing slump since the Great Depression is driving Ohio and 20 other states to propose consumer protection laws and bond sales that would help homeowners stem the defaults. Ohio, with one of the highest foreclosure totals in the United States last month, is raising $100 million to help homeowners refinance risky mortgages. New York, New Jersey and Pennsylvania are planning similar sales.
"We don't have much time to lose," the governor of Ohio, Ted Strickland, said in an interview. The foreclosure rate has "escalated rather dramatically."
Strickland, a Democrat who became governor in January, created a task force of public and private officials to work on ways to keep borrowers solvent.
Mortgages in foreclosure across the United States rose to 147,708 in April, up 62 percent from a year earlier, according to a report released Tuesday by RealtyTrac, based in Irvine, California. The median U.S. home price fell 1.8 percent in the first quarter, according to the National Association of Realtors. As many as 2.2 million Americans are at risk of losing their homes, the Center for Responsible Lending said in a study in December.
The foreclosures have "the possibility of making economic conditions worse, because they will shrink consumer spending," said Weihong Song, a professor of finance at the University of Cincinnati. The 2007 median price for an existing home is likely to drop 1 percent to $219,800 from 2006, the Realtors association said in a report this month. The last time the national median declined was probably during the Great Depression in the 1930s, said Lawrence Yun, the senior economist for the group. Housing accounts for about 23 percent of the U.S. economy, when taking into account purchases of furniture, appliances and the like, according to the Joint Center for Housing Studies at Harvard University.
The Ohio attorney general, Marc Dann, said Tuesday that he wanted to sue Wall Street firms because their sales of bonds backed by subprime mortgages had enabled consumers to get home loans they could not afford. Ohio has already won the right through a lawsuit to review foreclosures by New Century Financial, a bankrupt California-based lender. Dann may add investment banks and credit-rating firms to the case or bring new suits, perhaps using Ohio's civil version of the U.S. Racketeer Influenced and Corrupt Organizations Act.
At least 50 subprime mortgage lenders have halted operations, gone out of business or sought buyers in the past year, making it more difficult for consumers with limited or poor credit records to get loans. Ohio home sales fell 5.8 percent in the first quarter and the average price declined 1.5 percent to $143,383 from a year earlier, according to the Ohio Association of Realtors. Ohio had 11,431 default notices, auction sale notifications and repossessions by banks in April, 39 percent more than in March and 135 percent more than a year ago, according to data from RealtyTrac. Only California and Florida had more.
As residents struggle to make payments, states are seeking policy solutions. The State of New York Mortgage Agency may offer mortgages that would let borrowers replace risky home loans with a fixed rate through participating lenders, said a spokeswoman, Tiffany Berns. A New Jersey state senator, Ronald Rice, a Democrat from Newark, introduced legislation this week to allow the state Housing and Mortgage Finance Agency to borrow as much as $500 million so it could offer 40-year fixed-rate loans to owners in troubled mortgages.
"The states that are vulnerable should be looking to intervene to slow, if not reverse, this spiral," said Susan Wachter, a real estate professor at the Wharton School at the University of Pennsylvania in Philadelphia.
In Washington, the House Financial Services Committee is working on legislation to assist subprime borrowers if mortgage lenders do not, said the panel's chairwoman, Carolyn Maloney, a Democrat of New York. Senator Hillary Clinton of New York has called for subprime borrowers to be given new loans at lower rates.
In Ohio, Blackshear is not waiting for federal action. The county plans to send letters to residents alerting them of potential risks in their mortgages. He has identified 3,178 mortgages by eight subprime lenders that may have rising payments or interest rates that will reset. The mortgages were taken out from 2004 until March this year.
"It's unbelievable," Blackshear said. "If we catch it early, we have the best chance of saving and helping people. If we help 100 people save their homes, to me we've done a good deed."
Check out more on International Herald Tribune Market Place