Affordable housing advocates and specially trained foreclosure counselors are asking the Utah Legislature to route $1.4 million in foreclosure settlement funds to the Olene Walker Housing Loan Fund.
By doing so, lawmakers could ensure that the dollars get spent as intended in the Jan. 31 multistate settlement by funding financial foreclosure education.
Utah's portion was part of a $121 million settlement to resolve claims against the Jacksonville, Fla.-based Lender Processing Services Inc. and two of its subsidiaries. The company was accused of servicing mortgage loans using "robo" signing and other improper conduct, resulting in wrongful foreclosures.
During a press conference at the Capitol Wednesday, Kim Datwyler, executive director for the Neighborhood Nonprofit Housing Corporation in Logan, said that continued funding of certified counselors is critical now more than ever.
"Foreclosures in Cache County have doubled in the past year," Datwyler said. "We tend to lag about a year behind."
Preston Cochrane, chief executive officer for AAA Fair Credit Foundation in Salt Lake City, said his agency has more than 300 open files. Yet funding for trained counselors has dwindled, and staffing for all eight of the state's HUD-approved counseling agencies has dropped from 18 to eight.
"You could easily extrapolate statewide and we've got over 1,000 families in some state of foreclosure," Datwyler said. "If we don't help them, everyone gets hurt," referencing the ripple effect that occurs when families fall into a housing crisis and neighborhoods suffer from the impact of foreclosed homes.
Statewide there are eight nonprofit counseling agencies that are approved by the U.S. Department of Housing and Urban Development.
"The opportunity with this $1.39 million is a once-in-a-lifetime," Datwyler said, noting that the money came in after the governor's budget was established. "It was intended to help the people hurt by the bad acts of the mortgage servicers. Why can't we use it that way?"
Her agency has a 94 percent success rate in helping homeowners stay in their homes, Datwyler said.
Foreclosure fallout continues
1,292 • the number of foreclosures prevented between 2009-2011 by Utah's HUD-approved counseling agencies
$1.8 million • Federal stimulus funding that paid for those three years of foreclosure counseling in Utah
$100 million • estimated savings due to that foreclosure counseling
Source: Utah Housing Coalition