MIAMI GARDENS – As a real estate attorney, Miami Gardens Councilman Andre Williams says he understands the foreclosure issue “intimately.’’ He recently traveled to Washington, D.C. to attend a series of conferences with the U.S. Department of Housing and Urban Development (HUD), along with other elected officials and policymakers from around the country.
They were there to find out how a federal homeowner rescue plan passed earlier this year would affect cities like Miami Gardens, the largest predominantly black city in Florida, where the once-churning building boom has turned sour.
Today, the city is tied with Fort Myers in having the highest foreclosure rate in the state, at 12.4 percent (the statewide average is 8 percent). Some 4,400 homes went into foreclosure in Miami Gardens last year, and nearly 1,000 so far this year, out of a total of 30,000 homes (22,000 of which are designated “homesteads,’’ or primary residences).
To combat the high rate of foreclosures, Williams on Nov. 18 will host a foreclosure prevention seminar along with other organizations, for residents of Miami Gardens and northwest Miami-Dade. Williams also plans a foreclosure clinic in November where homeowners can negotiate directly with banks to make their mortgages more affordable.
Williams is hoping to help homeowners take advantage of the sweeping Economic and Housing Recovery Act of 2008. Signed by President George W. Bush on July 30, the act, which began to take effect on Oct. 1, allows the Federal Housing Administration (FHA) to ensure up to $300 million in 30-year, fixed-rate loans to some at-risk borrowers. The condition of approval is based upon whether lenders agree to reduce the mortgage balance to 90 percent of the home's appraised value, and share any proceeds from the sale of the home with the federal government.
The act also provides stricter oversight of Fannie Mae and Freddie Mac, the large corporations that guarantee the purchase and trade of mortgages and mortgage-backed securities. Also, the act gives cities block grants with which they can purchase abandoned or foreclosed homes outright, or take an equity stake from lenders.
Miami Gardens will get $6.87 million in block grants as part of the $3.9 billion “Neighborhood Stabilization Program” administered by HUD. Williams said the money will help prevent deteriorating properties from destroying property values and help the city recover some of the property taxes that are its lifeblood. The rules also allow cities to distribute some of the money as down payment assistance to first-time, low-income homebuyers, but Williams said he laments that the grant will do nothing to help homeowners who are already in foreclosure.
“It’s very disappointing that we can’t use any of that money for immediate relief for those in the midst of the foreclosure process,’’ Williams said, calling the federal plan a start, but also a bailout for banks.
Williams is now pushing for banks to give something back, and he has organized a foreclosure clinic in November, at which homeowners will be able to negotiate directly with lenders to work out their loans. Already, GMAC, Washington Mutual and Wells Fargo are on board. Williams has been working with them for months to move the process forward. He awaits word from other lenders such as Bank of America/Countrywide and Citibank. He hopes to tie negotiations to buy already foreclosed homes from the lenders to their participation in the clinic.
Asked whether he is seeking a kind of "carrot and stick" approach to the banks, Williams said, "absolutely."
"I absolutely hope it is the case that the city rewards those who are interested in helping our residents," he said. "Those (banks) who are not, we shouldn't be enriching them and rewarding bad behavior for those who don't want to participate in the process."
Williams’ efforts have caught national attention, including a recent profile in Time magazine. He said many people have the misconception that the foreclosure crisis, including in Miami Gardens, was caused solely by lower-income borrowers and subprime loans.
“I'm sure that’s to some degree true in Miami Gardens,’’ he said. “But I’m convinced that some folks having problems actually had good credit, but they also had stars in their eyes, and took out home equity loans and lines of credit. Then, the economy changed and the bottom fell out, and now they’re not able to make those payments.’’
One of Williams’ constituents who did not wish to give her name said she hopes the plan works.
The 42-year-old administrative assistant had a good job and income when she bought her home in 1989, but refinanced her home in 2005 to help with the medical bills when her mother became ill. After losing her parents and another relative, and then her job, in 2007, things went from bad to worse. The initial, fixed, “teaser’’ interest rate on the adjustable-rate loan increased, and the payments started rising.
Now employed again, the woman said she hopes her lender, GMAC, will work with her to make the loan affordable again, rather than proceed with foreclosure.
“I’m not looking to move,’’ she said. “I’m not used to moving around. I moved from my parents’ home to this home, and I don’t want to uproot myself and my kids.’’
She said she was alerted to the November clinic by a friend.
“I just hope (the bank) can work things out to where I have a comfortable monthly payment,’’ she said, “and can keep out of the situation I’m going through now.’’
Photo: Miami Gardens Councilman Andre Williams
IF YOU GO
WHAT: Miami Gardens Councilman Andre Williams, the War on Poverty-Florida, Inc. (WPF), Neighborhood Housing Services, The Urban Task Force and the Collective Banking Group will host a Foreclosure Prevention Seminar for the residents of Miami Gardens and northwest Miami-Dade.
WHEN: 6 to 8:30 p.m. on Tuesday, Nov. 18.
WHERE: The North Dade Regional Library, 2455 NW 183rd Street, Miami Gardens, in the auditorium.
PURPOSE: The goal of the November foreclosure prevention clinic is to reach the residents of Miami Gardens who are experiencing foreclosure, and provide opportunities and solutions for homeownership preservation. Participating lenders and specialists from the Neighborhood Housing Services will be on site to help community residents.
CONTACT: Amanda Hood, 786-469-2172, email: AHood@waronpoverty.org, website: www.waronpoverty.org
For more information:
Federal "Hope for Homeowners" program: www.hud.gov
City of Miami Gardens: www.miamigardens-fl.gov