April 29 , 2008
Philly.com

NEW HOPE ON FORECLOSURES

PROGRAM GIVES TIME AND HELP TO HOMEOWNERS

AS CONGRESS stumbles around looking for the light switch that might illuminate answers to the national foreclosure crisis, and as legislators in Harrisburg have yet to hammer out a compromise package of bills addressing the same, Philadelphia is offering homeowners and lenders caught in the crisis a practical route to resolution.

A new program called the "mortgage foreclosure diversion program" provides court-sanctioned negotiations between lender and borrowers to try to resolve troubled loans to avoid foreclosure.

What the program also avoids is the need for long-term foreclosure moratoriums, which provide relief for homeowners, but are legally problematic. Too often, too, moratoriums simply forestall the inevitable, because many homeowners don't use the time to work out their troubles with their lenders.

This new program puts owner-occupied properties facing foreclosure on a special administrative track that would give homeowners access to housing counseling and pro-bono legal advice. Investment and commercial properties are still subject to regular foreclosure proceedings.

Homeowners are required to meet with a housing counselor before a "conciliation conference," in which borrower and lender sit down and try to work out the loan. Common Pleas President Judge Darnell Jones deserves credit for the program, though he's working with a committee established in 2004 under Judge Annette Rizzo that brings together the city, housing advocates, lenders and social-service agencies.

Part of the new program is a hot line - 215-334-HOME - that puts callers in touch with legal and other help. Troubled homeowners should call this number today. The worst thing a homeowner facing foreclosure can do is ignore the problem; often, reaching out for help early can save a house. And every house that gets saved also saves a community.

That's why we're glad that the city has officially recognized this fact and is playing an important role on the committee. For too long, Philadelphia has experienced a troubling trend of thousands of foreclsoures each year; the city's silence on this has been both mysterious and tragic, given how even a single foreclosed house can, if abandoned, begin to decay a neighborhood.

This program may not only provide relief for Philadelphia homeowners, but could be a model for a larger program on a national scale.