Philadelphia’s Curb of Foreclosure Listings: Model for Cities
April 29th, 2009 by 
Joseph Smith
Philadelphia’s program of deflating listings of foreclosed homes has been cited by the Association of Community Organizations for Reform Now (ACORN) as an effective model for cutting down the number of foreclosed homes across the country.
ACORN, founded in 1970, is the country’s largest organization of both low-income and moderate-income families who are fighting for affordable credit and home ownership opportunities. Currently, it has over 400,000 families as members in 40 states and 110 cities.
ACORN said efforts by President Obama to help prevent houses from being added to foreclosure listings are laudable, but his programs are limited because the success of the programs relies on the cooperation of mortgage lenders.
The association said that state and local governments should be in the forefront of efforts to save their constituents from losing their houses to foreclosure listings.
ACORN said that other cities across the country can review Philadelphia’s foreclosure program and then adapt it. Under the program, ACORN claimed that more than 3 out of 4 distressed homeowners who have participated in the program have saved their houses from foreclosure listings.
According to ACORN, the most effective characteristics of Philadelphia’s program are: it is mandatory, it uses community outreach, it is easy for borrowers to join, and it takes advantage of the assistance of HUD- certified housing counselors.
The association said that cities need to implement foreclosure programs now, just like what Philadelphia is doing, because if the problem is left unchecked, about 9 million homes will be added to foreclosure listings in the next few years, as predicted by Credit Suisse.
ACORN said that 7 percent of all outstanding mortgage loans are in default and 40 percent of outstanding subprime loans are in default. It added that for every 13 seconds that pass, one American home is lost to foreclosure listings.
Philadelphia’s foreclosure prevention program is called Residential Mortgage Foreclosure Diversion Pilot Program and was launched on April 16, 2008. It required lenders to meet with distressed borrowers in conciliation meetings before the court decides on their foreclosure filings.
Borrowers are also required under the program to obtain foreclosure prevention counseling from agencies chosen for the program. Counselors are ordered to make certifications about their sessions with the borrowers.
Under the outreach scheme of the program, members of nonprofits and community organizations go around their assigned areas to check vacant properties and talk with distressed homeowners and then help them participate in the program to save their houses from foreclosure listings.
