Senators ask for $100M share in $16.65B settlement

OHIO FORECLOSURE RATES BETWEEN 2009 AND 2013

Thousands of homeowners went thorugh foreclosure proceedings in Southwest Ohio. Here the total number of homes that were foreclosed upon between 2009 and 2013:

Source: Source: Ohio Supreme Court, originally compiled by Policy Matters Ohio

Ohio’s two U.S. senators are asking for $100 million out of a $16.65 billion private settlement between Bank of America and the U.S. Department of Justice in order to provide relief for some of the state’s hardest-hit counties, including several southwest Ohio counties.

And the plan is to have this money funneled directly to the 22 county land banks that directly deal with properties in disrepair and need to be demolished in order to improve communities.

Sens. Sherrod Brown, D-Avon, and Rob Portman, R-Cincinnati, sent a letter to Bank of America last week asking the company to direct part of its multi-billion settlement reached in August to Ohio communities.

“It’s time that the big banks make right for these practices and reinvest in Ohio communities,” Brown said. “By securing these funds, we can help families stay in their homes and rebuild their neighborhoods. I urge Bank of America to invest in Ohio.”

Since 2009, more than 369,700 homeowners have been foreclosed upon by banks, and more than 88,000 of those homes were among 10 counties in Southwest Ohio. Hamilton (29,081), Montgomery (19,686) and Butler (13,115) are three of the top 10 counties with the most foreclosures in the state. Cuyahoga and Franklin counties top the list.

In a conference call Wednesday with reporters, Brown said they have requested upwards of $100 million be earmarked for Ohio in negotiations with not-for-profit groups, such as Thriving Communities Institute, and the county land banks that represent 70 percent of the state’s population.

Portman concurs with Brown and “strongly supports” the efforts of Ohio land banks and other stakeholders to help struggling neighborhoods get back on their feet. He said land banks and housing groups are at the forefront to turn around communities.

“Foreclosures and declining home prices have hit many of Ohio’s neighborhoods, and it’s crucial that the private and public sector work together on neighborhood stabilization efforts,” said Ohio’s junior senator.

Last month’s $16.65 billion settlement deal is the latest in national bank foreclosure settlements. Ohio benefited from the first national settlement — a $25 billion settlement in 2012 with the country’s five largest banks — when it received more than $300 million. The Ohio Attorney General’s Office, which is not involved in this latest settlement deal, created the Moving Ohio Forward grant program. Counties divvied up a share of $75 million to raze dilapidated, foreclosed and abandoned homes.

“For these bank settlements to be truly meaningful it’s critical that hard dollars find their way to the most seriously affected communities in Ohio,” said Jim Rokakis, director of Thriving Communities Institute, a northern Ohio agency that aids communities in revamping vacant and nonproductive properties.

After the $13 billion JP Morgan Chase settlement was announced, more than 100 people representing organizations around Ohio worked to develop a plan to give to banks when deciding where to distribute settlement dollars, he said.

“We think making donations to Ohio land banks could be attractive, for example,” Rokakis said.

Outside of verifying a land bank is legitimate, he said no due diligence is required of Bank of America — or any other financial intuition — which is ordered to pay restitution in connection to the mortgage fraud scandal.

Brown said in a phone conference on Wednesday with reporters that former Federal Reserve chairman Ben Bernanke touted that the economy will recover when manufacturing strengthens. The senior senator contends the housing market is also part of that equation.

“It’s been some 6 years since the financial crisis reaped terrible damage of homeowners and investors in our state and across the country. We’ve made progress, we know the economy can’t only recover only until the housing market does,” Brown said. “The manufacturing has turned around – not as much as we want – but it has been meaningful that way. Housing has not pulled it part in many ways.”

Foreclosures, though, have declined, Brown said, but not enough. Until 2012, the senator said Ohio had 14 consecutive years of more foreclosures than the year before.

“These funds won’t erase the housing crisis but it will help reverse its course,” Brown said.