Breaking Ground - October 2000

Out of Reach

Save the Date - COHHIO Annual Conference

HDAP Program Reopened

Tax Credit Allocation Plan Is Out

Action on HUD Fiscal Year 2001 Budget Expected Soon

Metro Strategy Group and AARP File Complaint Against Midwest National Mortgage Banc

COHHO Membership

COHHIO & NHT Present Project-Based Section 8 Transactions Workshop

2001 Annual Conference/Lobby Day Around the Corner - April 2-4

Lobbying is Not For Experts Only

What is a Predatory Lender and How Are They Different From Other Lenders?

People Like Me

Home Technical Assistance Available

Look for COHHIO in Your Workplace Campaigns

Activist Alert

Type Away - Carefully

McGraw-Hill Donates School Supplies

Beatitude House Wins Challenge

Resources

COHHIO News

 

 

For Many Ohioans, Affordable Housing is Out of Reach
Late last month, the National Low Income Housing Coalition (NLIHC) released its annual report which looks at the disparity between rental housing costs and the minimum wage. Out of Reach 2000: The Growing Gap Between Housing Costs and Income of Poor People in the United States, found that in no state, metropolitan area, or county is the minimum wage enough to afford an average two-bedroom apartment. The reality is that in 32 percent of all counties, 54 percent of all metropolitan areas, and 44 percent of all states, the amount one would have to earn to afford this same two-bedroom apartment is at least twice the federal minimum wage.

The study goes on to find that:

The number of poor, unassisted renters in this country is at an all-time high, and the number of housing units available to them is decreasing;

The amount one must earn to afford a one, two, or three-bedroom apartment anywhere in the country (called the housing wage) exceeds the minimum wage often by a factor of two or more; and

Low wage workers are faced with impossible demands on their ability to live in safe, decent, and affordable housing.

The situation in Ohio is no exception. In each of the state’s 88 counties, the amount one must earn to afford an apartment increased “across the board” from 1999. In fact, Ohio ranked seventh in the country, with a jump of nearly two percent in the housing wage. While a two percent increase might not sound like such a big deal, remember that the housing wage for an average two-bedroom apartment in Ohio in 1999 was $10.10 per hour. This year’s report shows that low-income workers within this state must earn at least twice the federal minimum wage or $10.30 per hour, if they are to afford rent for this same apartment.

 

According to the Out of Reach report:

30 percent of renters in this state are unable to afford rent for a one-bedroom apartment, 38 percent of renters in this state are unable to afford rent for a two-bedroom apartment, and 47 percent of the renters in this state are unable to afford rent for a three-bedroom apartment. In other words, they must pay more than 30 percent of their incomes for rent.

The housing wage (the amount one must earn) for a one-bedroom apartment in this state is $8.12 per hour (or 158% of the minimum wage), the housing wage in this state for a two-bedroom apartment is $10.30 per hour (or 200% of the minimum wage), and the housing wage for a three-bedroom apartment in this state is $13.21 per hour (or 256% of the minimum wage).

For the state as a whole, minimum wage workers must work at least 63 hours per week to afford rent for a one-bedroom apartment, 80 hours per week to afford rent for a two-bedroom apartment, and 103 hours per week to afford rent for a three-bedroom apartment.

 

 

The publication of this report comes at a time when much of our nation is enjoying a period of economic prosperity unseen, and indeed unheard of, in a generation. This “boom” represents one of the longest peacetime expansions in this nation’s history. Over the past six years, we have seen 18 million new jobs created. We have seen unemployment drop to a 40-year low. We have seen productivity and consumer confidence incline dramatically, while interest rates have declined. The number of Americans owning their own homes is at a record high.

This is happening while the federal minimum wage remains stuck at $5.15 per hour, and the median salary and bonus package for Chief Executive Officers (CEO’s) in “Corporate America” has increased to an astounding $770 per hour! Think about it. It takes an average CEO less than two days to earn what a minimum wage worker earns in an entire year.

Rather than improving, things are only getting worse. Case in point, there has been a steady increase in the housing wage (the amount one must earn to afford an average two-bedroom apartment) for the State of Ohio over the past four years. In 1999, the housing wage was $10.10 per hour. In 1998, the housing wage was $9.90 per hour, and in 1997, the housing wage was $9.53 per hour. Today’s housing wage is $10.30 per hour!

The information presented in this article is specific to the State of Ohio. If you would like to receive additional information pertaining to individual counties or to specific Metropolitan Statistical Areas (MSA’s), please visit either the COHHIO web page at www.cohhio.org, or the National Low Income Housing Coalition web page at www.nlihc.org.

SAVE THE DATE - COHHIO Annual Conference -
April 2, 3 & 4, 2001, Radisson Airport Hotel - Columbus
COHHIO's annual conference will include in-depth institutes, plenary sessions, panel discussions, and workshops. As well as plenty of opportunities to network, share ideas about what's working in your community and to seek input for problems facing your community. The conference will end with a Lobby Day, making our legislators focus on the issues that directly affect the problems and solutions in your community. Please plan on attending. Look for additional information in upcoming issues of our newsletter, as well as, on our web page at www.cohhio.org.

 

HDAP Program Reopened
In a real victory for housing advocates, the Housing Trust Fund Advisory Board and the Ohio Housing Finance Agency board approved reopening of the HDAP program in September. HDAP will be able to provide loans or grants for:
- preservation, including Section 8 property transfers, Mark-to-Market rehab costs and other preservation projects.
- hownership development projects (for homeowners up to 80 percent of area median income
- non-tax credit rental development projects (primarily those with special needs)

This special HDAP round will be conducted under revised guidelines in a competition. The release of the guidelines was due out September 25 with a submission date of November 9. However, as of October 6, the guidelines have yet to be released and COHHIO has heard that the deadline is likely to be extended. Over $9 million in HDAP funds made available through the Housing Trust Fund are expected to be available for distribution. Unfortunately, the struggle continues with the Ohio Housing Finance Agency/Ohio Department of Development...

Tax Credit Allocation Plan Is Out
The draft tax credit allocation plan is available. Significant changes are being proposed this year. One of the most troubling changes is the Local Tax-Exempt Involvement , which propses a reduction from 20 points to 5 points for non-profit sponsored projects and for joint venture projects by both for-profit and non-profit development. This change will open the door for out-of-state developers and syndicators who have been complaining that they don't have equal access to Ohio's programs. To receive a copy of the draft plan, please call Sean Thomas at OHFA at 614/466-7970 or visit the OHFA web page at www.odod.state.oh.us/ohfa. Please be sure to submit comments on the reduction of points for non-profits under the Local Tax Exempt Involvement section and any other issues. Comments should be sent to Sean Thomas at OHFA at 77 South High Street, 26th Floor, Columbus, Ohio 43215-6108; 614/466-7970; 614/644-5393 (fax) •and to Governor Taft at 77 S. High St., Columbus, Ohio 43215; 614/466-3555; 614/466-9354 (fax). Please contact Bill Faith at COHHIO at 614/280-1984 with any questions.

Action on HUD Fiscal Year 2001 Budget Expected Soon
In mid September, the HUD Appropriations bill was marked-up and subsequently passed by the full Senate Appropriations Committee. At the end of the day, the Committee approved just over $30 billion for HUD’s Fiscal Year 2001 budget. This amount, while an increase over what the House of Representatives approved in June of this year, is still nearly $2 billion less than the Administration requested. While the Senate Appropriations Committee did recommend modest increases in several program areas, the Appropriations bill still has to get through Conference Committee, where the final details will be worked out. The following table provides an overview of the Senate Appropriations Committee’s recommended funding levels for selected programs (dollars in millions):

HUD Program FY 2000 FY 2001 FY 2001 FY 2001
Enacted Request House Approved Senate Mark-up
Housing Certificate Fund 11376 14128 13275 13171
Contract Renewals 10640 13010 13275 13131
New Section 8 Vouchers 346 690 0 0
Shelter Plus Care Renewals - 37 37 0
Housing Production Incentives - 8 0 0
HOPE IV 575 625 565 575
Elderly Housing (Section 202) 710 779 710 779
Disabled Housing (Section 811) 201 210 201 210
HOME Investment Partnership 1600 1650 1585 1600
Community Development Block Grant 4800 4900 4505 4800
Homeless Assistance Grants 1020 1200 1020 1020
Shelter Plus Care - - - 105
Housing for Persons with AIDS (HOPWA) 232 260 250 232
Rural Housing & Economic Development 25 27 20 27
Fair Housing Assistance Program 20 21 22 22
Fair Housing Initiatives Program 24 29 22 22
Emergency Food and Shelter Program 110 140 110 110

Contrary to the budget bill passed by the House, the Senate Appropriations Committee chose not to fund Shelter Plus Care renewals out of Section 8 funds, but actually created a separate appropriation for Shelter Plus Care (renewals and new assistance) funded at $105 million.  The Conference Committee appears to have worked out a compromise, and agreed to fund a separate Shelter Plus Care appropriation for renewals only. Though the amounts have fluctuated, it looks as though renewals will be funded at $100 million for the upcoming year, while the Homeless Assistance Grants remain funded at just over $1 billion.

The Senate’s mark-up as did the bill passed in the House, included no new incremental vouchers. The Committee report also made clear that the Senate has some real concerns about voucher utilization rates as well as the Administration’s reliance on vouchers as the sole means of creating new housing opportunities.  
The Housing Needs Act of 2000 (S. 3033), which was introduced by Senator Bond of Missouri and included in the Appropriations bill, uses $1 billion of excess Section 8 funding for the production and preservation of affordable housing.  The funds were to be block-granted to State Housing Finance Agencies on a per capita basis.  Unfortunately, the sole vehicle for getting a new production/preservation program through Congress this year did not survive the Conference Committee.

The HUD Appropriations bill is one of 13 that Congress must pass and the President must sign before this session of Congress comes to an end. To date, only two of the 13 have been passed by Congress and subsequently signed by the President. The remaining 11 Appropriations bills, including the HUD Appropriations bill, are in a state of uncertainty. Congress is working to pass its second Continuing Resolution, which essentially keeps the government up and running. The somewhat arbitrary deadline established by the resolution is October 14th. Between now and then, the remaining 11 Appropriations bills will be acted upon. In all likelihood, the facts as reported above will change. Please stay tuned to the COHHIO web page (www.cohhio.org) for the latest developments regarding the HUD Appropriations bill.

 

Metro Strategy Group and AARP File Complaint Against Midwest National Mortgage Banc - $10 Million Sought From Predatory Lender
The Metro Strategy Group (MSG) filed a civil complaint in U.S. District Court against Midwest National Mortgage Banc, based in Cincinnati, requesting punitive damages of $10 million. Two Cleveland area women, who refinanced their homes with Midwest, have joined MSG in the suit. The women are represented by the American Association of Retired Persons (AARP) Foundation. AARP has invested much energy in informing consumers about how to avoid predatory situations.

The complaint against Midwest alleges specific targeting of female borrowers, through telemarketing schemes, for residential loans with promises of unrealistically low mortgage rates. In the period from August 1999 through May 2000, Midwest was found to have made twice as many loans to women without co-applicants as men without co-applicants. They have been charged with failing to explain loan terms to borrowers, with falsifying information on applications, misrepresenting loan terms and fees, making little or no effort to ascertain the financial capabilities of borrowers, and conspiring to funnel "fees" as kickbacks for worthless services to corporations with whom they share officers and profits.

A number of complaints from borrowers have been received, alleging the receipt of unsolicited marketing calls from Midwest, resulting in loans for which they were charged substantially higher interest rates than were quoted.

Such predatory practices have come to light more and more recently, in the wake of a groundswell of attention, and organized action being taken, against such lenders across the country. Leaders such as Federal Reserve Chairman Alan Greenspan, and HUD Secretary Andrew Cuomo have publicly denounced this form of lending. The State of North Carolina (where some 50,000 families have reportedly been victimized) has enacted legislation and the State of New York has instituted regulations to curb these practices.

Though predatory lenders attempt to target the most vulnerable of consumers - i.e. those who are elderly or who are low-income, minority, and/or struggling financially, such as being in arrears on mortgage payments - those who are presumably educated and somewhat savvy, have also succumbed to pressure tactics or responded to the salesperson's portrayal of himself or herself as a loyal ally in their struggle. Given the complexity of home financing, it is not surprising that the most astute citizens cannot adequately ascertain "hidden" fees and other misrepresentations. For more information, contact Chip Bromley at MSG at 216/371-4285.

Reprinted from the Metro Eye, newsletter of the Metropolitan Strategy Group, September 2000.

Coalition on Homelessness and Housing in Ohio Membership
Name
Organization
Address
City, State, Zip
Phone, Fax, County
Individual: _____ $35 (Regular) _____ $75 (Benefactor) _____ $250 (Sustainer) _____ $10 (Low-Income) _____ Fee Waiver Requested
Agency (according to budget): _____ $35 (100,000 or less) _____ $75 (100,001-250,000)
_____ $125 (250,001-500,000) _____ $200 (500,001-1 million)_____ $250 ($1 million-$1.5 million) _____ $300 (over $1.5 million)

Please send your tax deductible check to COHHIO at 85 E. Gay St, Ste. 603, Columbus, Ohio 43215.
Thank you for your support!

 

COHHIO & NHT Present Project-Based Section 8 Transactions Workshop
COHHIO and the National Housing Trust (NHT) are sponsoring a two-day workshop for non-profit housing developers interested in acquiring project-based Section 8 properties. Preserving Ohio’s Affordable Housing: A Transactions Workshop for Non-Profit Housing Developers will be held at the Wyndham Dublin Hotel in Columbus on November 1 and 2, 2000. NHT is a national nonprofit organization formed to preserve and improve federally assisted housing for low and moderate income use. Thanks to Ohio Capital Corporation for Housing and the U.S. Department on Housing and Urban Development for providing support for this workshop!

Tentative Agenda - November 1 & 2
Wednesday, November 1
8:00 - 9:00 Registration and Continental Breakfast
9:00 - 9:30 Introductions
9:30 - 10:15 Why Preserve?
10:15 - 11:00 Overview of Federally Assisted Housing: An Historic Perspective
11:15 - 12:30 Status of Most Recent Statutes and Regulations Pertaining to the Prepayment of Subsidized Mortgages and Section 8 Contract Expiration
12:30 - 2:00 Lunch (provided)
2:00 - 3:30 The Owner’s Perspective
3:45 - 4:45 How to Identify Opportunities and Potentially “at risk” Properties in Your Area
4:45 - 5:00 Round Up and Questions
5:00 - 7:00 Reception (sponsored by Ohio Capital Corporation for Housing)

Thursday, November 2
8:00 - 8:30 Continental Breakfast
8:30 - 9:30 Introduction to / Refresher on Development and Operating Budgets
9:30 - 10:45 Potential Funding Sources
11:00 - 12:00 Other Avenues to Acquisition
12:00 - 1:15 Lunch (provided)
1:15 - 2:30 Predevelopment Activities and Due Diligence (part I)
2:45 - 3:45 Predevelopment Activities and Due Diligence (part II)
3:45 - 4:15 Property Management - Pitfalls and Alternatives

Workshop presenters scheduled to attend include:
Emily Achtenberg - Housing Consultant, Boston, Massachusetts
Nancy Trick - Director of Housing Programs at Reznick Fedder & Silverman, Bethesda, Maryland
Gillian Ament - Project Manager with the National Housing Trust, Washington D.C.
Scott Kline - Vice President and Development Director, National Housing Trust, Washington D.C.
Representatives from Ohio Capital Corporation for Housing
Representatives from the Ohio Housing Finance Agency

Hotel Accommodations
The Wyndham Dublin Hotel is offering a discounted room rate of $99 per night! Workshop participants are responsible for making reservations by calling the hotel directly at 614/764-2200, or toll free through central reservations at 800/WYNDHAM. You must identify yourself as a participant in the Coalition on Homelessness and Housing in Ohio workshop. To get the special rate, you must make your reservation by October 10. There are a limited number of rooms available.
Registration
Registration includes workshop materials and the following for both Wednesday and Thursday: continental breakfast, lunch, coffee break and soda break. Space is limited - registration is limited to the first 50 registrants.

Scholarships
A limited number of scholarships will be available to those who demonstrate a financial burden and would not otherwise be able to attend the workshop. Please submit your written request to Jill Russ at COHHIO at 614/463-1060 (fax) or email at jillruss@cohhio.org or mail it to COHHIO, 85 East Gay Street, Suite 603, Columbus, Ohio 43215-3118. The deadline is October 3, 2000.

REGISTRATION
(1 person per form, form can be copied, please PRINT clearly)

Name:
Organization:
Street Address:
City, State, Zip:
Phone, Fax, E-mail:
Counties Served:
_____ Please check for vegetarian lunch

Workshop Registration: $75.00 (COHHIO member) and $100.00 (non-member)

Total Enclosed: _______________ (COHHIO Federal ID #31-1189029)
Payment Amount: Check No. __________ OR Purchase Order No. _______________

Checks may be made out to COHHIO and registrations may be sent to 85 East Gay Street, Suite 603, Columbus, Ohio 43215-3118. Credit cards are not accepted. Payment must accompany registration. No phone or fax registrations. Registrations are not guaranteed after October 24, 2000. Questions? Contact Jill Russ at COHHIO at 614/280-1984 or by email at jillruss@cohhio.org.

 

Special Sessions for Tenant Leaders

Tenant leaders of project-based Section 8 properties are invited to attend Preserving Ohio’s Affordable Housing, A Transactions Workshop for Non-Profit Housing Developers in the afternoon on Thursday, November 2. Tenants will arrive in time for lunch on November 2, and stay for the remainder of the workshop that day. The workshop will continue Thursday evening and Friday, November 3, for tenants. Topics to be covered include: Basic Organizing, Structuring Tenant Representation, Value-added Programs, and Fundraising. In order to attend, tenant leaders must live in properties that are in need of non-profit acquisition in order to remain affordable. Space is limited to two tenant leaders per property. Registration information for the Tenant Leadership portion of the conference will be mailed directly to tenant organizations in the near future. For more information, call Jill Russ at COHHIO at 614/280-1984.

2001 Annual Conference/Lobby Day Around the Corner - April 2-4
As we get ready to start planning our 2001 Annual Conference and Lobby Day, there are several issues on the “proverbial” table. Perhaps today, more so than in recent memory, the stakes are at an all-time high. Over the past few months, we have found ourselves fighting battles that had already been fought and won. Nothing is to be taken for granted. That is why this upcoming lobby day is so important. With a governor and an administration that has yet to view housing as anything more than a distraction, with a record number of state legislators feeling the pinch of term limits, and with the presidential election on the horizon, the world in which we operate is changing. We can sit by and watch the changes take place, or we can roll up our sleeves and be an agent for positive change. As Frederick Douglas put it “power concedes nothing without demand.”

Whether it is advocating for an increase in the Housing Trust Fund, adoption of the proposed Temporary Assistance for Needy Families (TANF) and housing demonstration program, or passage of state-wide anti-predatory lending legislation, now is the time to demand change. These, as well as other issues, are likely to be “hot” topics at COHHIO’s Annual Conference and Lobby Day on April 2, 3 and 4, 2001. Please stay tuned for future editions of our newsletter or check out the web page (www.cohhio.org) for additional information on why it is important to lobby.

Lobbying is Not For Experts Only
Sometimes people won’t lobby because they’re afraid they don’t know how. They are staunch supporters of their cause, they recognize the importance of lobbying, and they know it pays off. Yet they hold back on the mistaken notion that lobbying is only for experts.

Like anything else, the more you know about how to lobby, the better you will be. But, again, if you can make a phone call or write a letter, you can lobby.

All you need to be a lobbyist - not just “a” lobbyist but an effective lobbyist - are three things: 1) A few basic facts; 2) Belief in your cause; and 3) Common sense.

The most important single thing a lobbyist needs to know is his or her subject. What is the substance of the legislation you are proposing (or opposing)? Why is it so important? What will happen if it passes? What will happen if it does not pass? How much will it cost?

Normally, the place to get these facts is the headquarters of the organization you have joined because you believe in its objectives. Normally, whoever asks you to get involved in lobbying, perhaps the chair of your legislative committee or the executive director of your association, will provide these facts along with the call for action. No responsible organization is going to ask its volunteer to lobby without arming them with the facts.

Know Your Legislator
It certainly helps to know the legislator or legislators you contact. What are their interests? What are their backgrounds? What is their record of support? What positions do they hold in the legislature? Who is the chair of the committee that will consider your proposal? Who is the chief spokesperson for the opposition?
Finally, the good lobbyist knows how the system works: what steps a proposed municipal ordinance or state law or federal appropriation bill goes through from introduction to enactment; which committees will consider the legislation.

All of this information should be provided by your staff and volunteer leadership. And before you know it, you may well be the one who’s providing the information to the beginning lobbyist.

Conviction Counts
Facts alone are not enough. Without conviction, dedication to the cause, loyalty to the organization, and determination to see the job through no matter how long it takes (and it can indeed take long!), a lobbyist won’t be very effective. Far better to say “no” than to agree to lobby for something when your heart isn’t in it.
The true believer is the volunteer who is greeted not only by name but by “Oh yes, let’s see now. You’re with the wildlife people.” When they greet you like that, your battle is half won.

Concentration Counts
This is not to be equated with so-called “single-issue politics” wherein a group places its own narrow interests above any and all other concerns. It is indeed regrettable when a lobbyist, whether volunteer or professional, takes the position that anyone who does not support his or her cause must be thrown out of office no matter how excellent his or her overall record may be. Moreover, such a statement by a charity employee is partisan political activity, which is prohibited.

What it does say is the effective lobbyist should concentrate total effort on the one particular cause and not scatter shots, speaking for one group one day and another the next.

Common Sense
The minimum principles you need to know are these: be brief, be clear, be accurate, be persuasive, be timely, be persistent, be grateful.

These common sense principles apply whether you’re lobbying by telephone, by letter, or face-to-face. The only one that’s a bit difficult for the beginner is timing. There are good times, better times, and best times and, until you’ve become an expert in your own right, your organization’s staff or volunteer leadership should call the shots on timing.

Never promise reward for good behavior or threaten retribution for failure to support you. Leave politics at home. Be persuasive rather than argumentative or demanding. Don’t knock the opposition; they probably believe in their position as sincerely as you believe in yours.

When you write, keep your letter to a single page - literally. If you need more space, enclose an attachment elaborating on that one-page summary. Be absolutely sure you spell your legislator’s name correctly and get the address right. If you don’t, he or she will wonder how credible the rest of your letter is. And, of course, always personalize your letter. Get the facts from your organization but use your own words on your own stationery.

Face-to-Face
The first time you meet face-to-face with your United States Senator - or, for that matter, your city councilperson - you probably will have butterflies in your stomach. It would be unusual if you didn’t.

If you’d feel better having someone else along, fine. Just so the one who accompanies you can also speak to the matter at hand and is not obviously just along for the ride. And while two may be better than one; three is not better than two. Hold it down.

Always Be Brief
Again, as in writing, be brief. Make an appointment, be on time, state your case, and leave. Plan to cover your topic in five minutes if possible, ten minutes at the most. Don’t linger unless your legislator chooses to prolong the meeting.

If you get hit with any questions you can’t answer, admit it and provide the answers later. Don’t bluff - it always shows. When you depart, hand your host a written summary - again, a one-pager - of your position and state exactly what it is you want him or her to do about it.

Aides Are Influential
Do not be offended if you don’t get to see the boss. Even if you had a firm appointment, you may be referred instead to an assistant. The demands on a legislator’s time are unbelievable and quite often he or she cannot avoid last minute changes in schedule.

Never underestimate the importance of an aide. Treat him or her just as you would your legislator, not only as a matter of courtesy but because the aide is in a position to advance your cause or sink it without a trace.

Thank You!
When you get back home, of after you’ve talked with your legislator by phone, or after he or she has voted your way or done something else to help you, send a thank-you letter. The vast majority of all mail a legislator gets is either asking for personal favors, complaining about something the government has or has not done, or blasting the legislator for something he or she has or has not done. A thank-you letter really scores. Besides, it’s the polite thing to do.

Always Report Back
Report back to your organization. Whom did you see or talk with? What did you discuss? What was his or her position? Your report and those of other volunteers are indispensable to your leadership in planning strategy.

You Lobby?
Of course you will. It’s fun; it’s stimulating; you’ll learn a lot; you’ll be a real participant in this business called democracy. And not only will you help bring about that change you feel is so important but you’ll get more satisfaction out of lobbying than you ever imagined.

Reprinted from Lobby? You? Yes, Your Organization Can! It Should!, Independent Sector For more information, visit the Independent Section web page at www.IndependentSector.org.

 

What is a Predatory Lender and How Are They Different From Other Lenders?
If you’ve been reading the COHHIO newsletters or checking out the COHHIO web page over the past few months, you have probably noticed an increase in the amount of information pertaining to predatory lending. As part of our ongoing effort to educate and inform our partners about predatory lending and the devastating impact it is having on families and communities throughout the state, we are giving this issue a lot of “air time.”

In recent years, there has been a tremendous increase in the number of mortgage loans made by lenders specializing in lending to borrowers with sub-par credit histories. These lenders, known as “subprime lenders,” are often times independent mortgage or finance companies, but they can also be thrifts or even banks. Some larger banks have affiliate mortgage companies that are subprime lenders. Subprime lenders typically charge borrowers higher fees and interest rates than “prime” lenders, based upon the risk of the loan. By providing loans to borrowers who do not meet the credit standards in the prime market, subprime lenders can and do play a critical role in this economy. These borrowers may have what is often referred to as “bruised” credit histories, they may have insufficient credit histories, or non-traditional credit sources. Through the subprime market, these borrowers can buy a new home, improve their existing home, or refinance their existing mortgage to increase their cash on hand.

According to The Woodstock Institute in Two Steps Back: The Dual Mortgage Market, Predatory Lending, and the Undoing of Community Development, from 1993 to 1998, loans made by prime lenders rose substantially slower than those by subprime lenders, with a 38 percent increase in home purchase loans and a 2.5 percent increase in refinance loans. Corresponding increases among subprime lenders were 760 percent and 890 percent respectively. One possible reason for this dramatic increase in loans made by subprime lenders pertains to the increasingly segmented system of consumer finance, with higher-income communities as the main target of more highly regulated banks, thrifts, and their affiliates who seek to cross-sell account and investment products. At the same time, lending to lower-income and minority communities is often viewed as an isolated line of business, in which the focus is on the short-term transaction and associated fees.

Lenders active in these communities tend to be mortgage and finance companies subject to substantially less regulation than banks and thrifts.

The overall growth of the subprime market as evidenced by the explosion of loans made between 1993 and 1998, combined with the almost hyper-segmentation of mortgage lending markets by race and neighborhood, has created opportunities for abuse. This dual finance system has fueled the rise of subprime firms and has increased the “room for abuse” within the market, especially for less sophisticated homeowners. Abusive mortgage lending, or what has been dubbed “predatory lending,” often leaves homeowners with substantial debt that they cannot afford or are unwise to take on.

What makes a sub-prime lender different from a predatory lender? While most sub-prime lenders serve a need by targeting borrowers with sub-par credit histories, some go too far. Those that go too far are known as predatory lenders. Lending practices become predatory when lenders target specific populations (usually low-income, minority, and/or elderly homeowners) with high pressure marketing techniques, charge excessive fees, frequently refinance or “flip” the loan, and often times mislead the borrower. Ohio is not immune to this practice. In low-and moderate-income and minority communities throughout the state, one or two predatory lenders often dominate the market, while prime lenders are nowhere to be found.

These predatory lenders are literally harvesting the equity that homeowners have built up over the years. By loading the loan with excessive fees, high interest rates, and pricey insurance premiums on the front end, predatory lenders are all but ensuring themselves a pay-off. In many ways, it’s a win-win situation for the lender and a lose-lose situation for the borrower. If the borrower makes the monthly loan payments, which are often times inflated (excessive fees, high interest rates, and pricey insurance premiums), the lender is making a profit. If the borrower is unable to make the monthly payments, the lender forecloses and sells the house for a profit. Predatory lenders go beyond risk-based pricing, and instead set loan terms high above what they need to offset costs and earn a return that compensates for the increased risk.

This is typically done through high interest rates, high points, high origination fees, unnecessary credit life insurance, and other additions to the loan. Many of the loan terms described below may not be predatory on their own.

Though the failure of the lender to fully disclose to the borrower the risk or cost associated with each individual term can make the loan package more problematic, especially if the borrower is unaware that better terms may be available. Many of these terms, in and of themselves, may not be fraudulent, unethical, or prohibited by law, but thrive because there is a lack of competition in the marketplace and a lack of information for consumers.

By structuring the debt with excessive fees and interest rates (beyond those needed to cover costs and reasonable, risk-adjusted returns), by “packing” and financing these excessive fees, and by “flipping” or frequently refinancing with fees being rolled back into the loan, some lenders are able to exploit low-income, minority, and elderly homeowners. These practices raise serious community reinvestment, fair housing and fair lending concerns, largely because banks and their mortgage and/or finance company subsidiaries appear to be representing the market and targeting minority communities for higher priced, lower quality products.

As reported in The Subprime Market Share in Ohio, the share of the mortgage market held by subprime lenders in minority neighborhoods is significantly higher than the share of the mortgage market held by subprime lenders in non-minority neighborhoods. The State of Ohio is third in the country with respect to the number, and fifth in the country with respect to the percentage of refinancing loans originated by subprime lenders. According to 1998 Home Mortgage Disclosure Act (HMDA) data, more than 52,000 refinancing loans were made by subprime lenders within the state. The vast majority of these loans were made in substantially minority census tracts. In some of these census tracts, as many as 80 percent of all refinancing loans were made by subprime lenders.

While this information in and of itself is specific only to subprime lending, it does offer some insight on what has come to be known as “predatory lending.”

While not all subprime lenders are predatory lenders, all predatory lenders are in fact subprime lenders. That being said, an increase in subprime lending activity throughout the State of Ohio correlates directly with an increase in predatory lending practices. It is estimated that in other states, approximately 25 percent of all subprime loans contain one or more terms that can be classified as predatory. If you apply that rationale, an estimated 13,000 of the 52,000 refinance loans originated by subprime lenders in Ohio in 1998 were in fact predatory loans.

Unfortunately, the situation in Ohio is representative of a larger epidemic. According to the U.S. Department of Housing and Urban Development (HUD) in Unequal Burden: Income & Racial Disparities in Subprime Lending in America, subprime loans are five times more likely in minority neighborhoods than in white neighborhoods, and three times more likely in low-income neighborhoods than in high-income neighborhoods. Clearly there is a problem.

These factors combined with the literal explosion in the predatory lending market over the past few years have created a situation within the State of Ohio that must be addressed. The most vulnerable or traditionally underserved populations (low-income, minority, or elderly homeowners) are being singled out and taken advantage of by predatory lenders. This is a practice that must stop. As long as predatory lenders go largely unregulated, as long as they are allowed to take advantage of often times low-income, minority, and elderly homeowners, and as long as we continue to sit idly by, they will continue to destroy entire communities one block at a time.

If you would like additional information on what is being done to put an end to predatory lending practices within the State of Ohio, or would like to be placed on the mailing list for the state-wide anti-predatory lending task force, check out the COHHIO web page at www.cohhio.org, or contact Rick Taylor at COHHIO at 614/280-1984 or via e-mail at ricktaylor@cohhio.org.

 

People Like Me...
In September, the National Coalition for the Homeless, in collaboration with the National Health Care for the Homeless Council, launched an effort to mobilize homeless people and to give voice to their dire need for affordable and appropriate health care. Poor health and a lack of access to health insurance are among the causes of homelessness in this country. The People Like Me campaign aims to have some 50,000 postcards designed by homeless people and carrying the message of universal health care, sent to candidates for public office in 2000. Please join the National Coalition for the Homeless as they set out to place universal health care, especially for homeless people, back on the national public policy agenda. For additional information or to view the postcard designs, please visit the National Health Care for the Homeless Council web page at www.nhchc.org/peoplelikeme2.html.

 

HOME Technical Assistance Available
As reported in March of this year, COHHIO was awarded a grant by the U.S. Department of Housing and Urban Development (HUD) to provide training and technical assistance regarding the HOME Investment Partnership Program. The primary emphasis of the technical assistance is to work with HOME participating jurisdictions throughout the state, in an effort to improve their ability to design and implement affordable housing strategies which focus on building and fostering partnerships with and between individual communities, local for-profit and not-for-profit housing developers, as well as financial intermediaries, in an attempt to not only preserve the existing stock of affordable housing, but to encourage the development of new affordable housing.

In an effort to make participating jurisdictions aware of the technical assistance that is available, COHHIO is proposing a two-pronged approach. First, a series of regional forums will be held throughout the state. These forums will be designed to make jurisdictions aware of the technical assistance that is available, and to start the process of identifying those requesting and/or needing additional assistance. From there, once a jurisdiction has been identified, COHHIO will begin the individualized work by conducting an in-depth analysis of the jurisdiction’s various planning tools (consolidated plan, Public Housing Authority 5-year plan, mental health/alcohol and drug addiction board community plan, etc.) as well as the design of its HOME program. Following the analysis, a series of focus groups and/or individual interviews with key “stake-holders” will be conducted. Based upon the analysis and the key “stake-holders” interviews, a brief report will be prepared which will outline the action steps necessary for the jurisdiction to design and implement a comprehensive affordable housing strategy tailored to their individual needs and priorities.

In addition to the action steps necessary, the report will identify potential partners among individual communities, both for-profit and not-for-profit housing developers, and financial intermediaries. The report will also identify additional technical assistance activities that could be provided by COHHIO or another technical assistance provider, to address specific local needs and priorities. If you are interested in learning more about the assistance that can be provided, or would like to co-sponsor one of the regional forums, please contact Rick Taylor at COHHIO at 614/280-1984 or via e-mail at ricktaylor@cohhio.org.

Look for COHHIO in Your Workplace Campaigns
COHHIO, through Greater Columbus Community Shares, will be participating in several workplace campaigns this fall. Campaigns include:
Columbus Combined Federal Campaign
Franklin County
The Ohio State University

COHHIO is also participating in Combined Federal Campaigns around the state, including: Cincinnati, Cleveland, Dayton/Miami Valley, Lima, Mansfield/North Central, Stark County, Toledo/Maumee Valley, Trumbull County, and Youngstown/Mahoning Valley.

Please look for COHHIO in any of these campaigns! If you have any questions, please contact Susan Francis at COHHIO at 614/280-1984 or by email at susanfrancis@cohhio.org.

 

Activist Alert
COHHIO is implementing an activist alert network. Those wanting to be added to the network may be contacted by mail, phone, fax or email.

Please check below the topics you would be interested in receiving alerts about and add your contact information to the form below. We would only be contacting you if you select a topic that has a pressing need for some action.

 

Topics:

__ Welfare Reform

__ CRA/OCRP

__ Section 8/Housing Preservation

__ Homeless Youth

__ Federal/State Budget Issues

__ Housing Trust Fund

__ Supportive Housing

 

__ Criminalization/Violence Against Homeless

__ Housing Development

__ NIMBY

__ General Housing Issues

__ General Homeless Issues

__ Other _________________________

 

Name:
Organization:
Address:
City, State, Zip
County, Email:
Phone, Fax:


Please return this survey to Susan Francis, COHHIO, 85 East Gay Street, Suite 603, Columbus, Ohio 43215-3118 or fax to 614/463-1060. For questions, call Janet Holcomb at COHHIO at 614/280-1984. If you have already completed this form, you do not need to fill out another form.

 

Type Away - Carefully
Computer keyboard operators beware! Repetitive motion injuries may involve the funny bone, but they are no laughing matter. Attention must be paid to carpal tunnel syndrome (CTS) and repetitive motion hazards for keyboard operators.

Computer keyboard work is essential in most jobs in the year 2000. Typing uses nine flexor tendons that share the dime-sized carpal tunnel with the median nerve, the culprit of CTS. If the wrist is awkwardly bent, or if external pressure is applied by resting on the bottom of the wrist of heel of the hand, the pressure in the carpal tunnel can increase as much as 120 percent.

The nerves: the more joints involved in a task, the more likely a nerve will get compressed. Vulnerable places where nerves come close to the skin’s surface are more likely to experience compression and cause pain.

The three major nerves involved in wrist-work are the median, radial and ulnar.
• Median nerve. This nerve runs through the middle of the wrist and is located at center, upper-most inside palm of the hand. You can irritate the nerve by resting on the wrist, or working with the wrist bent or twisted during prolonged activity. You may sense pain and tingling in the thumb, index finder, long finger and half of the ring finger.
• Radial nerve. This nerve controls the muscles for lifting the wrist and fingers during typing. This nerve is vulnerable on top of the wrist in line with the index finger. Typing with the hand in a claw or hovering over the keyboard with the wrist extended can cause painful burning into the back of the hand, and along the thumb-side of the wrist.
• Ulnar nerve. This nerve is vulnerable in three places: close to the side of the neck under the large ridge of muscle, at the inside of the elbow above the joint or funny bone, and on the pinky-side of the wrist. You may irritate it by constantly reaching forward, or letting a sharp desk edge cut into the forearm muscles while working. Note: CTS is compression only of the median nerve. Compression of the radial and ulnar nerves is not CTS.

Beating CTS: the best strategy against nerve compression is avoiding frequent finger movement; maintaining a neutral wrist posture; and taking small, slow and gentle stretch breaks. Take care with stretch exercises. Sometimes stretching can actually add to the risk if done incorrectly or if the wrong types of stretches are used.

You also should:
know which body positions are likely to compress important nerves; breathe deeply and use relaxation techniques to decrease stress; address the early warning signs of nerve injury; and allow hands to “float” above the keyboard to eliminate pressure on the wrist (The Bureau of Workers' Compensation does not recommend wrist rests. Sometimes wrist rests can increase pressure in the carpal tunnel, which can lead to CTS. Information taken from the Bureau of Workers' Compensation, Division of Safety & Hygiene.

 

McGraw-Hill Donates School Supplies
Employees of McGraw-Hill Companies in Columbus completed a successful drive to collect school supplies for at-risk youth in the central Ohio area. The two week drive resulted in collection of much needed supplies for area students. Some of the items collected were: crayons, pencils, markers, scissors, tape, book bags, writing tablets, pens, highlighters, notebooks, paper and calculators. Through these donations, COHHIO’s AmeriCorps Houses the Homeless Program was able to supply 130 children with quality school supplies for this school year. By helping these children be prepared for school, McGraw-Hill has helped raise the children’s self-esteem and has assisted the children in their efforts to excel in school.

COHHIO’s AmeriCorps Program divided the donations into individual bags, donated by Wild Oats Community Market. The supplies were distributed to families at the Sawyer Manor in Columbus at their monthly Tenant Council meeting. Sawyer Manor is a housing complex owned by the Columbus Metropolitan Housing Authority.

Thanks to the employees of McGraw-Hill for their donations and support of youth in Central Ohio.

 

Beatitude House Wins Challenge
As written about in previous COHHIO newsletters, Beatitude House in Youngstown has been fighting for their transitional housing program for homeless families all the way to the Ohio Supreme Court. The Supreme Court recently ruled in favor of Beatitude House's project. The Supreme Court found that the proposed use of the property was consistent with local zoning ordinances and that the zoning approval was made properly. COHHIO filed an amicus brief in support of the project. Congratulations to the Beatitude House!

Resources
TRAININGS
November 1 - Intermediate Micro Enterprise & Small Business Lending, Community Economic Development Workshop Session, Ohio CDC Association, Columbus. Will cover principles of debt collection and proven strategies for effectively re-capitalizing programs through repayment. $50. For more information, contact Sue Baumgardner at Ohio CDC at 614/461-6392.

November 8-10 & December 6-7 - Introduction to Community Economic Development, Ohio CDC Association, Columbus. $100-$150. For more information, contact Ohio CDC Association at 614/461-6392.

November 14-17, Residential Lead Hazard Abatement for Workers, Ohio Department of Development (ODOD), Office of Housing and Community Partnerships (OHCP), Xenia. This course uses the latest EPA model curriculum for workers. In addition, the course features hands-on practice skill development sessions; Occupational Safety and Health Administration; EPA and HUD compliance methods; and worker/occupant protection strategies. $100 for each training. For more information, call Tom Sherman at OHCP at 614/466-2285.

November 20-21 - Growing Together: Annual Ohio Housing Conference, Ohio Housing Finance Agency and Ohio Capital Corporation for Housing, Columbus. For more information, contact Kelly Jo Marks at OCCH at 614/224-8446/www.occh.org or contact OHFA at 614/466-0400/www.odod.state.oh.us/ohfa.

PUBLICATIONS
Program Operations Series, Enterprise Foundation. Manuals include: Creating Homes for People with Special Needs; Developing Singe-Family Subdivisions, Successful Single-Family Acquisition and Rehab; New Construction of Single-Family Housing for Infill; Creating Multifamily Rental Housing Through Renovation; Developing Multifamily Housing with New Construction; Developing and Managing Scattered-Site Rental Housing, Understanding the HOME Investment Partnership Program and Operating a Home Improvement Program. For more information, contact Tanai Sanders at the Enterprise Foundation at 800/205-5122 or by email at tsanders@enterprisefoundation.org.

FUNDING
- TJX Foundation. Provides grants to organizations that give support for services that provide shelter, enhance education and job readiness and build community ties. Areas of interest include children/youth services, disabled, economically disadvanataged, homeless and women. Grants are awarded on an ongoing basis and average between $500 and $120,000 for continuing support, general/operating support and program development. For more information, contact Christine Strickland at 508/390-3199.
- Public Welfare Foundation. Awards grants to organizations that provide services to disadvantaged populations. Funding is focused on: disadvantaged elderly, disadvantaged youth and community economic development and participation. The Foundation provides general support and project-specific grants. Most grants average $25,000 to $50,000 and cover a period of one year, but requests for funding renewals and multi-year grants also are accepted. Grants are approved throughout the year. For more information, visit their web site at www.publicwelfare.org or call 202/965-1800.

Free Legal Resources. Ohio State Bar Association - 614/487-2050 - offers 21 brochures covering different legal concerns, free. "Law & You: An Online Handbook of General and Everyday Law Affecting Ohio Citizens," is available on their web site at www.ohiobar.org. Ohio Women's Legal Assistance and Education Coalition - 800/282-3040 - provides referrals to resources, services or lawyers for a variety of problems, including civil rights violations, domestic violence and women's issues. "Legal Rights Handbook" covers several topics including landlord/tenant issues, all with a particular focus on women. Ohio State Legal Services Association - 614/299-2114 - serves clients whose incomes do not exceed 125 percent of the poverty level (currently $17,000 annually for a family of three). Ohio Attorney General - 800/282-0515 - Consumer Protection Hotline. Ohio Civil Rights Commission - 614/644-8104 - offers alternative dispute resolution, and informal and confidential process designed to help solve disputes without going to trial. Ohio Commission on Dispute Resolution and Conflict Management - 614/752-9595 - for conflicts not involving civil rights or labor matters, they will offer advice in finding a qualified mediator. Ohio Consumers' Council - 877/742-5622 - consumers can call the OCC hotline to ask questions about billing problems and other issues or to order educational materials covering topics such as choosing a utility provider.

Commissioner - Housing, Toledo. Under administrative direction of the Director of Neighborhoods, this position is responsible for planning, administering, and supervising the Division of Housing engaged in providing housing rehabilitation programs, single and multi-family new construction, including CDBG and HOME programs. Minimum requirements: Bachelor's Degree in Business Administration, Public Administration, Construction Technology or closely related area and five years of responsible administrative experience in a community-based or public housing organization with emphasis in housing construction and management, of which two years must have been in a supervisory capacity. Must be a resident of the City of Toledo within six months of appointment. Salary: $45,000 to $70,500, depending on qualifications and experience. Interested candidates should submit a detailed cover letter and resume to the Department of Human Resources, One Government Center, Suite 1920, Toledo, Ohio 43604 no later than January 28, 2000. The City of Toledo is an equal Opportunity Employer. Minorities, females and individuals with disabilities are encouraged to apply.

COHHIO News
Board Recruitment. COHHIO is accepting applications for COHHIO board membership. The board meets approximately five to six times per year, plus an annual board retreat. If you are interested in becoming a COHHIO board member, please send a letter of intent and a resume to Bill Faith, COHHIO, 85 East Gay Street, Suite 603, Columbus, Ohio 43215-3118; 614/463-1060 (fax) or email to billfaith@cohhio.org.

Join COHHIO’s Workers Compensation Program and SAVE!! COHHIO saved its member 84 percent on premiums last year and the savings have been among the highest in the industry for three years in a row. For every $1 your company would have paid in premiums, with the COHHIO group, you would have paid .16 cents and saved .84 cents. Joining a group rating program is the only way to ensure that you won’t pay any more than you have to for workers’ compensation. The group rating option allows employers with good safety and claims records to pool together to enjoy discounted premiums. For more information on COHHIO’s Workers’ Compensation Group, please call Susan Francis at COHHIO at 614/280-1984 or email at susanfrancis@cohhio.org.

COHHIO is moving! COHHIO has outgrown its current offices. As a result, COHHIO will be moving its offices on November 10. The new address is 35 East Gay Street, Suite 210, Columbus, Ohio 43215-3138. COHHIO’s phone and fax numbers will remain the same. Please note that our phone system and email system will be down on November 10.

Visit www.cohhio.org to find newsletter articles. The COHHIO web page, www.cohhio.org, has all of COHHIO’s newsletters archived from January 1999 through the most recent issue. You can find an article you’re looking for, copy an article for use in your newsletter or forward the article onto someone else. All articles can be reprinted with a mention that it was reprinted from COHHIO. You can also access the newsletter quicker on the web page than by mail. The newsletter is posted on the web page the day it goes to the printer’s, so you can access the newsletter articles prior to it being mailed out. Please contact Susan Francis at COHHIO at 614/280-1984 or by email at susanfrancis@cohhio.org with any suggestions you have for the web page.

CORRECTION. In the September issue of Breaking Ground, COHHIO published an article called, “Welfare Reform: the Northwest Ordinance, and Me” by Alice Skirtz. In that article, COHHIO provided the author’s contact information at the Salvation Army in Cincinnati. The correct contact information for Ms. Skirtz is Applied Information Resources, 830 Main Street, Suite 900, Cincinnati, Ohio 45202, 513/381-4041. We apologize for any inconvenience.

(614) 280-1984 Voice
(614) 463-1060 Fax

cohhio@cohhio.org