Monday, September 1, 2003

What can be done? There's no consensus

By Ken Alltucker
The Cincinnati Enquirer

Stricter laws and better-educated home buyers are needed to curb foreclosures and mortgage fraud in Hamilton County communities, neighborhood activists and politicians agree.

But there's little consensus on what new laws should be passed or even how effective consumer-education programs are.

What's been done:

• Lending industry lobbyists convinced Ohio lawmakers a year ago to pass a law prohibiting cities from regulating mortgage abuses. The theory: a hodge-podge of city laws would discourage lenders from doing business in certain communities.

While Cleveland is fighting the law in state court, a Montgomery County judge last week dismissed Dayton's lawsuit challenging the restriction. Toledo passed a law requiring lenders to increase disclosures to mortgage shoppers, and other cities such as Akron and Cleveland Heights are considering tougher laws, too.

Cincinnati City Councilman John Cranley calls the state law "immoral," but says there's little local interest in joining the fight. "I'd like to concentrate on the things we can control," he says.

• The Cincinnati City Council last September passed an ordinance outlawing signs and fliers on utility poles - a favorite method of investors seeking potential home sellers. The city also convinced Hamilton County Municipal Court judges to create a housing court to bring more scrutiny on blighted properties.

Yet as excellent as the court is in theory, it has failed to live up to its promise, some community leaders say.

"This is a wonderful opportunity. What have we done as a city? We've blown it," says Pete Witte, president of the West Price Hill Civic Club. Witte, who also is a candidate for City Council, says Cincinnati and the court have been slow to prosecute derelict properties in Price Hill. The community identified a "dirty dozen" list of 12 blighted properties, but none has been brought before housing court.

• Some neighborhood groups aren't waiting for government help. They refer home seekers to counseling and programs for first-time buyers.

But the main problem with consumer education is that its lessons don't always stick with future homebuyers, says Steve Olden, a Legal Aid lawyer who represents homeowners with mortgage complaints.

"It has a shelf life of a month or two," Olden says. "The brokers and lenders can talk their way over it, to the effect that the consumer believes the broker instead of the counselor."

• A few neighborhood groups have tried buying, fixing and reselling homes themselves to fend off speculators.

The North Fairmount Community Center bought, repaired and sold 85 homes to families over the past two decades. Another 18 homes were built and 41 were renovated by the South Cumminsville Community Council.

"We succeeded there for a minute," says Marilyn Evans, president of the South Cumminsville group. She says the efforts helped improve homeownership in the 1980s and early 1990s, while reducing crime and chasing out slumlords.

But the rise of high-interest loans, foreclosures and illegal property scams have ravaged the community, she says.

"All of a sudden, it seems like we've taken 12 steps backwards."

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