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LISC San Diego Foreclosure Plan Final Word03 Version1
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LISC San Diego Foreclosure Plan Final Word03 Version1

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San Diego LISC Foreclosure summary and work plan

San Diego LISC Foreclosure summary and work plan

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  • 1. LISC San Diego-Helping Neighbors Build Communities San Diego County Mortgage Foreclosure Crisis 2008-2009 Presented to: Joe Horiye LISC San Diego Presented by Trinity Investment Capital Art Rivera, Vice President April 2009 April 1 Prepared by Trinity Investment Capital April 15, 2009
  • 2. LISC San Diego-Helping Neighbors Build Communities Table of Contents I. Executive Summary-San Diego County Mortgage Foreclosure Crisis A. Overview of Mortgage Crisis B. Impacts of Crisis 1. Individuals and Families a. Economic b. Social 2. Neighborhoods and Community 3. Regional Economy C. Environment that lead to the Crisis II. Foreclosure Crisis Strategies A. Public B. Private Sector 1. Lending Institutions 2. Local Developers and Investors a. Hallmark Communities b. Investors C. Local Nonprofits III. Challenges and Gaps to Existing Strategies IV. Mortgage Foreclosure Program and Services A. Pre – Foreclosure/Foreclosure Prevention 2 Prepared by Trinity Investment Capital April 15, 2009
  • 3. LISC San Diego-Helping Neighbors Build Communities B. REO Properties: San Diego NCST Strategy – The First Look Program Chart A. Pre – Foreclosure/Foreclosure Prevention Chart B. REO Properties: San Diego NCST Strategy V. NCST Target Communities A. Tier I Communities 1. City Heights 2. Logan Heights/ Barrio Logan B. Tier II Communities 1. Southeastern San Diego The opinions expressed represent solely the opinions of the author, not those of LISC San Diego or Local Initiative Support Corporation, or of any of the persons, entities or organizations providing support to, or affiliated with these entities. The findings and conclusion of this report are solely the responsibility of the author. This study was performed with the support of LISC San Diego, with editing and production by Barbara Hall, Coastal Collaborative Consultants. The Corporation has full rights to use and distribute this document. 3 Prepared by Trinity Investment Capital April 15, 2009
  • 4. LISC San Diego-Helping Neighbors Build Communities I. San Diego County Mortgage Foreclosure Crisis Executive Summary This paper aims to describe an overview of the foreclosure crisis in San Diego with a focus on two major elements - the National Stabilization Program and a series of recommendations that take into account current market factors and long term affordability via homeownership. In October 2008, San Diego County ranked as the 6th highest foreclosure rate in the nation. As of 2009, the nation has experienced an exponential rise in foreclosures and San Diego currently ranks 23rd in the country. The foreclosure rate for San Diego is higher than for the state average in general with only San Bernardino and Riverside counties having greater numbers of foreclosed homes. The 2008 total of 31,099 notices of default (NODs) are a 54 percent increase over 2007. Home foreclosures for December totaled 1,253, up 20% from the previous month. There were 17,712 foreclosures within San Diego County, a 141% increase over 2007. The trend appears to be on the upswing as the effects of CA Senate Bill 1137’s have diminished and only delayed foreclosures temporarily. San Diego County, which in 2004 ranked as the least affordable housing market in the country, has dropped to 26th as local prices fell and incomes rose. However, the National Association of Home Builders reports that 44.6 percent of homes sold from October through November of 2008 were affordable to households earning the median income of $72,100. The target areas designated by the San Diego Housing Commission (SDHC) as Neighborhood Stabilization Program (NSP) areas have census tracts where 70% to 80% of local resident’s incomes are well below the AMI. These areas also tend to be the oldest housing stock in the county. The San Diego region has a number of nonprofit organizations (NPOs) that have maximized human capital focused on assisting distressed consumers. Among the most solid is Community HousingWorks (a Community Development Corporation) which is the largest CDC to dedicate an entire department to foreclosure counseling. In 2007 CHW released their foreclosure-specific offshoot, Housing Opportunities Collaborative (HOC), to stand alone as a nonprofit dedicated to assisting foreclosure distressed homeowners. The HOC is a democratically operated collaborative with 4 Prepared by Trinity Investment Capital April 15, 2009
  • 5. LISC San Diego-Helping Neighbors Build Communities over 40 members. They represent the best foreclosure activities in the Western US. Their collaborative structure maximizes resources and has been recognized and awarded by a number of organizations and elected officials. In addition, the HOC has been invited to many other jurisdictions to share their business model. Politically, San Diego has been experiencing budgetary shortfalls and credit issues long before the current crisis; the 2009 recession has worsened the budget issue. All political leadership are focused on the budget and has been recently worsened due to State shortfalls and a HUD request for a multi-million dollar refund of previous years’ CDBG funding that was not properly justified. Political sentiment and willingness to work on the foreclosure crisis is evident but the budgets are heavily constrained and many of the critical players are under increasing budgetary stress and more than half the City Council seats are newly elected with no significant political leadership experience. The San Diego City Neighborhood Stabilization Program (NSP) targets specific zip codes: 92102, 92104, 92105, 92113, 92114 and 92154. These zip codes include the San Diego neighborhoods known as Barrio Logan, Logan Heights, San Ysidro, Otay Mesa, City Heights and Southeastern San Diego. A most glaring gap for the San Diego market is the lack of funding for pre-and-post foreclosure counseling. In order to stabilize impacted neighborhoods there is a need outreach to those facing foreclosure and to potential buyers that will own and live in their purchased homes; driving residential stabilization. Improving outreach, counseling and HOC “HOME clinics” will increase the ability of workforce and first time buyers to purchase REO inventory that currently is sold to investors. Another gap is the lack of access to Real Estate Owned (REO) portfolio data. Investors are bidding on NSP target area REO properties with multiple offers thus discouraging owner occupant purchasers. One of the strategies to overcome the access issue is to work with national REO portfolio owners, Fannie Mae and the National Community Stabilization Trust to have them consider providing better real time data through a “first look” program that would give access to NSP transactions before release to the 5 Prepared by Trinity Investment Capital April 15, 2009
  • 6. LISC San Diego-Helping Neighbors Build Communities general market. The current strategy to circumvent aggressive investors is to assist owner occupants in buying “short sale” properties. This report contains a pilot concept recommending an REO real estate brokerage sales model that sells foreclosed REO property through a local nonprofit acting as the REO broker. This provides a more equitable opportunity for owner-occupants to purchase homes in NSP target areas. The model would provide a no cost, long term solution and help stabilize communities while providing financial support for many of the services needed by residents. Other strategies are included in the report but there is a dearth of capital available for affordable housing in San Diego. As such we offer no firm strategy other than recommending that a consortium of San Diego stakeholders work to facilitate the creation of a collaborative enterprise for REO acquisition and disposition. Bringing together locally capitalized stakeholders could create as investment pool; revolving loan fund, in the range of $2 to $4 million dollars that could “jump start” a larger wave of community stabilization investment. Due to manpower and capital limitations it is recommended that any geographic pilot activities target City Heights and Logan Heights/Barrio Logan neighborhoods. These two LMI communities were selected due to their public transportation orientation and the fully developed community support structures/infrastructure already available in these communities. They are both ‘live/walk” communities and are recipients of the local LISC “Neighborhoods First” initiatives. In the first quarter of 2009 we have seen low-and-moderate neighborhood market segment heat up as properties are receiving multiple bids, driving up prices. The trend appears restricted to the LMI market as these homes are seen as profitable by investors; other sectors are still moving slowly. Currently, the City Heights market has become a hot market. The CDCs and stakeholders are experiencing frustrating volatility in the City Heights market. The frustration appears to be driving early stage discussions for creation of a small, localized, consortium with revolving fund that will focus on working through the National Community Stabilization Trust (Trust) to target REO acquisition. The Trust’s 6 Prepared by Trinity Investment Capital April 15, 2009
  • 7. LISC San Diego-Helping Neighbors Build Communities “First Look” program component is now more appealing than ever as it promises to offer early access, 15% discounts and real bidding on better real estate opportunities. This report demonstrates that the San Diego market has enormous human capital dedicated to the crisis but has little financial capital and agencies are under increasing budgetary constraints. Given the tenor of the recessionary economy, resilient thinking and collaborative actions appear to be the norm into the unpredictable future. LISC leadership could be the spark that stimulates collaborative neighborhood resources to create local solutions that will encourage a larger wave of investment. 7 Prepared by Trinity Investment Capital April 15, 2009
  • 8. LISC San Diego-Helping Neighbors Build Communities A. The Mortgage Crisis Overview About a third of REO properties are located in low-and-moderate-income (LMI), mostly minority and immigrant, communities in the City of San Diego, Escondido, Chula Vista, El Cajon, and Oceanside. Nearly 28% of NODs issued were to homeowners in these communities. The incidence of foreclosure in the low-and- moderate-income (LMI) remains at much higher rates than the rest of the County. The highest rates of foreclosure are impacting LMI neighborhoods. While the median home price in the County is near $400,000 and prices in the county have declined on average 30 per cent. We are seeing evidence of plummeting prices in the Neighborhood Stabilization Program (NSP) target areas where average home prices are in the 30% to 50% percentiles in LMI areas. City REOs Loan Amount NODs Loan Amount City of San Diego 591 $190,256,009 1646 $579,151,629 Escondido 180 $53,127,434 379 $124,754,253 Chula Vista 112 $39,826,378 337 $114,752,862 El Cajon Bostonia 140 $40,572,640 290 $111,377,905 Oceanside 90 $28,031,839 230 $78,044,017 The study also reports that 58% of the REO in LMI income communities are owned by 10 banks. 8 Prepared by Trinity Investment Capital April 15, 2009
  • 9. LISC San Diego-Helping Neighbors Build Communities San Diego County Top Institutions with REOs Institutions REOs Loan Amount BANK OF AMERICA 14 $ 2,226,470 COUNTRYWIDE 266 $ 86,155,164 AMERICA’S WHOLESALE LENDER 88 $ 29,573,591 Total 368 CHASE HOME MORTGAGE 68 $ 22,789,105 WASHINGTON MUTUAL /CHASE 79 $ 29,368,450 Total 147 UNKNOWN 84 $ 2,054,450 EXECUTIVE 72 $ 23,039,325 DEUTSCHE BANK 59 $ 20,651,065 WELLS FARGO 49 $ 14,481,292 LITTON LOAN SERVICING 48 $ 15,351,623 US BANK 47 $ 16,344,829 AURORA LOAN SERVCING 46 $ 17,698,392 SAXON MORTGAGE 34 $ 11,789,989 Grand Total 954 $ 291,523,745 Source: Bouton and Associates, 2008 B. Impacts of Crisis 3. Individuals and Families a. Economic Greater challenges to economic self-sufficiency. Homeownership is the primary method for individuals and families, particularly lower income and moderate households - to build assets, create wealth, and overcome poverty. Decreases in property values means individuals and families, who owe more than their properties are worth, lose the bulk of their assets and wealth. Individuals and families are no longer able to finance equity from their homes to pay for their children’s college education or other major financial needs. 9 Prepared by Trinity Investment Capital April 15, 2009
  • 10. LISC San Diego-Helping Neighbors Build Communities Credit scores that people have worked to build or repair are reduced, making it harder for them to access future credit opportunities, car and student loans, open bank accounts, and even secure jobs in certain industries. Lower-income borrowers will be perceived to be even greater risks by investors and will pay greater costs for mortgage loans for which they do qualify. b. Social A 2007 survey conducted by the American Psychological Association found that nearly half of Americans identified housing costs, including rent and mortgage payments, as significant sources of stress. Mental health specialists are reporting that financial difficulties, defaulting mortgages, and foreclosures are leading to increased incidences of anxiety disorders, depression, domestic violence, marital problems, and addictive behaviors such as alcoholism and gambling, and, in a few cases, suicide among Americans. The Brookings Institution estimates that over the next two years, nearly two million children will be directly impacted when their families lose their homes to foreclosure. These children will have their education disrupted, strained relationships, and lose their sense of security. Counseling staff at the SDSU Foundation’s and MAAC Project’s, Driving Under the Influence (DUI) programs report an increase in numbers of clients, many of whom cite the economy and housing issues as the main reasons for their heavy use of drugs and alcohol. 4. Neighborhoods and Community Lower home and property values, MDA Data Quick found that San Diego County median prices went down to $328,000 in September 2008, down from $350,000 in August and 30% below September 2007’s median price of $470,000. The current median home value for the county is $285,000. 10 Prepared by Trinity Investment Capital April 15, 2009
  • 11. LISC San Diego-Helping Neighbors Build Communities Homeowners with strong credit, who are in safe, fixed-rate loans and who are paying their bills on time are suffering from the reduction in property values and home equity wealth associated with foreclosures in their neighborhoods. Median Sales Price % Change City June – August 2008 San Diego -7.3 Chula Vista -7.6 Escondido -14.3 El Cajon -9.6 Oceanside -9.2 Source: Bouton & Associates, 2008. Foreclosed properties that are not well maintained lend to the physical deterioration of neighborhoods, further decreasing property values and exacerbating perceived and real safety issues. Abandoned foreclosed properties attract criminal activity as they become attractive nuisances for drug addicts and street gangs. Reduction in consumer base and loss of profits for neighborhood businesses when residents are forced to move out of the area or have to cut back on spending to meet their mortgage payments. Less retail sales reduces tax revenues for the cities, counties, and states. Reduced property taxes collected by local government to support infrastructure, vital programs and services, and other public expenditures. 11 Prepared by Trinity Investment Capital April 15, 2009
  • 12. LISC San Diego-Helping Neighbors Build Communities 3. Regional Economy Surplus of vacant properties and limited access to financing reduces need to construct housing, resulting in less work for thousands of carpenters and other building trades workers. Jobs in other occupations within the housing industry cluster (engineers, architects, surveyors, equipment and building material suppliers, etc.) are also negatively impacted. Finance related jobs continue to be cut, resulting in higher unemployment rates. Financial giant Citibank laid-off over 10,000 workers while Caterpillar, with subsidiaries such as Solar Turbines located in San Diego, announced plans to lay-off 20,000 employees. Job losses and fear of job security has reduced consumer spending on retail goods, travel, and personal services. These industry sectors have also been impacted with companies closing stores and facilities across the country, resulting in increasing unemployment and home foreclosures. C. Environment that lead to the Crisis Many San Diegans, particularly lower and moderate income minorities and immigrants, purchased homes that they couldn’t really afford. Housing values were increasing in urban neighborhoods with the influx of new residents, mostly young adults who desired to live close to work and the downtown area. Historic discriminatory practices that limited homeownership properties were reduced creating opportunities for homeownership. There is tremendous value and desire for homeownership among lower and moderate income households. Many lower and moderate income minority and immigrant homebuyers had limited knowledge and information about homeownership and financial 12 Prepared by Trinity Investment Capital April 15, 2009
  • 13. LISC San Diego-Helping Neighbors Build Communities products. Homeownership is the main and most accessible strategy to build assets and wealth in the United States. Condo conversions reduced the supply of affordable rental housing, forcing lower and moderate income households to move further East, North, and South of the border. Many San Diegans felt pressured to buy for fear of being pushed out of the real estate market and their communities. Affordable housing was available to purchase in Riverside and Imperial Counties, this would require longer commute times to work and separation from family and other support systems for many households. Regrettably, many bought homes in distant suburbs when gasoline costs were about $2 per gallon. In late 2008 the region saw dramatic price increases to near $5 per gallon and resulting economic stress and escalation in foreclosures. LMI San Diegans were willing to take on greater risks and even “bad” loans to become homeowners. Many real estate and lending professionals seized on the opportunities created by this environment, targeting LMI minority and immigrant communities for unconventional loan products. Buyers who would never qualify for traditional loan products were able to become homeowners without really understanding the terms of their loans and, often, willing to pay the high mortgages because of the pressure to buy. There was little to no enforcement of mortgage brokerage regulations. U.S. fiscal and foreign policies have negatively impacted national and local housing markets, resulting in the current economic crisis. Economic downturn exacerbated the situation as increases in gas and oil prices, and subsequently, utilities and most consumer goods, created greater financial burdens on households already struggling to pay high mortgages. Wages did not keep up with real costs of living. Economic development strategies created a two-tier employment system – high salary professionals 13 Prepared by Trinity Investment Capital April 15, 2009
  • 14. LISC San Diego-Helping Neighbors Build Communities and technology jobs and low-wage service sector jobs. Traditional middle- class jobs in manufacturing and other sectors were lost in the region as these were sent off-shore to countries with lower labor and business costs. II. Foreclosure Crisis Strategies A. Public White House President Obama unveiled his foreclosure prevention strategy which will give up to 5 million of Americans access to low-cost mortgage refinancing; eliminate restrictions that prevent responsible homeowners with reduced equity from refinancing and benefitting from current low interest rates that will reduce their payments; provide incentives for loan servicers to modify mortgages and prevent foreclosure; and support the Treasury Department and the Federal Reserve with buying securities backed by Fannie Mae and Freddie Mac mortgages to provide "stability and liquidity in the marketplace”. These policies are evolving on a daily to weekly basis. Government Sponsored Enterprises (Freddie Mac and Fannie Mae) Targets loan servicing companies that collect mortgages for sale and distribute them to investors. Targets borrowers who are three months behind on loans for owner-occupied properties and owe 90% or more than the current home value. Interest rate is reduced so borrower pays no more than 38% of income for housing expenses and/or loan are extended from 30 years to 40 years, and for some the principal amount may be deferred interest-free. Fannie Mae will offer some of its REO portfolio at a 15 percent discount. Newer details of their program(s) are being developed. Office of Housing and Urban Development HUD Neighborhood Stabilization Program (NSP) provides block grants to eligible jurisdictions for land banks, acquisition, rehab, and sale of homeownership and rental properties. Demolition of foreclosed properties is also an eligible use as well as first-time homebuyer education for buyers purchasing foreclosed properties. A second phase of NSP funding is expected in summer 2009. 14 Prepared by Trinity Investment Capital April 15, 2009
  • 15. LISC San Diego-Helping Neighbors Build Communities HUD Foreclosed Properties works with private agents to sell properties directly to homebuyers and investors. There are very few HUD foreclosed homes in the region. Federal Housing Administration HOPE for Homeowners program will create refinance mortgages for some borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD's Federal Housing Administration (FHA). Federal Deposit Insurance Corporation Proposes establishing standards for loan modifications and providing guarantees for loans meeting those standards. The government would compensate loan servicers for losses in cases of re-default (when a borrower receives a modified loan but then ends up becoming delinquent on the new mortgage). California Housing Finance Agency National Foreclosure Mitigation Counseling Program assists housing counseling agencies in the state to expand foreclosure counseling services to California homeowners at risk. Qualifying agencies—both rural and urban—that participated in the application are receiving sub-grants to strengthen their foreclosure counseling services. Community Stabilization Home Loan Program aims to help first-time homebuyers purchase homes in communities hardest hit by the foreclosure crisis. First-time homebuyers will be eligible for below-market interest rate loans to purchase foreclosed homes in the following zip codes - 92102, 92104, 92105, 92113, 92114, and 92154. These zip codes mirror the San Diego NSP zip targets. State of California Governor’s Office The Governor sponsored a bill that requires loan servicers to offer a 90-day “stay” for the foreclosure process for owner-occupied homes that have received notices of default. Lenders could be exempted from the stay by proving they have an "aggressive modification program". Loan modifications would be modeled on the approach used by the FDIC. New monthly payments would not exceed 38% of borrowers' incomes. Lenders could reduce the interest rate, increase the loan 15 Prepared by Trinity Investment Capital April 15, 2009
  • 16. LISC San Diego-Helping Neighbors Build Communities length up to 40 years and/or defer some of the principal balance until the home is sold or refinanced. Such loan modifications could cut payments by 25% to 30%. California Assembly SB1137 goes beyond federal laws and requires lenders and servicers to: 1) contact borrowers (or engage in a prescribed process to do so) to schedule telephone or in-person meetings on restructuring options before beginning the foreclosure process; 2) requires a 60-day notice to be given to tenants of buildings facing foreclosure before they can be removed from a rental housing unit, and 3) allows fines of up to $1,000 a day for owners of foreclosed properties that fail to adequately maintain them. County of San Diego Proposes to establish a loan program for first-time homebuyers to purchase and reduce REO properties in target communities. City of San Diego Mayor’s Office Mayor’s Foreclosure Task Force will focus on 1) Increasing demand; getting more buyers safely into the real estate market. 2) marketing pre-foreclosure and foreclosure prevention services offered throughout the city through the Housing Commission website and 3) Preserving neighborhoods; discussed but declined establishing a new code enforcement ordinance modeled after the City of Chula Vista ordinance. Offers online help via the Housing Commission web portal. Redevelopment Agency The agency is exploring using its funding to rehabilitate foreclosed properties. San Diego Housing Commission (SDHC) SDHC is the designee for the City’s NSP funds. They are exploring changing their property acquisition procedures to expedite development efforts including vacant or blighted properties and will recommend that the City Council consider focusing funds from the Community Development Block Grant (CDBG) program for the next two years on eligible activities that address the foreclosure issue. The major part of the Commission’s NSP award will employ their existing first-time homebuyer 16 Prepared by Trinity Investment Capital April 15, 2009
  • 17. LISC San Diego-Helping Neighbors Build Communities loan program to reduce REO properties in target communities by providing subsidized financing to first time home buyers (<120% AMI) . The City’s NSP program focuses on the areas hardest hit by high-cost mortgage loans. The area’s foreclosure data were overlaid by high-cost loans per 1,000, by census tract then overlaid by City Council Districts (3, 4, 7 and 8) and the six hardest hit zip codes were derived as the NSP target areas: 92102, 92104, 92105, 92113, 92114 and 92154. The NSP has a budget of $6.8 million to assist First time Home Buyers in the <120% AMI category, this will serve about 92 – 130 households. Other uses of NSP include: homebuyer education and counseling, and demolition of REO properties by the City to facilitate redevelopment efforts. It will explore using its Lead Hazard Mitigation funds to improve and “right size” obsolete or deteriorated homes. The NSP funds those at <50% AMI with a $2.1million budget. For homebuyer education there is $50,000 budgeted. San Diego Reinvestment Task Force/Capital Collaborative RTF was the earliest identifier of the impending foreclosure crisis. They facilitated a convention of diverse stakeholders to address the mortgage crisis at which pre- foreclosure and foreclosure prevention services were identified as a critical need. Over time the group identified the need for capital resources to preserve neighborhoods and to create investment in the poorest neighborhoods. The Capital Collaborative and Land Bank were founded. The focus was to leverage private investor resources to purchase foreclosed properties for homeownership sales and rental properties. However, as the end of 2008 saw the official declaration of a “Recession” the Capital Collaborative was undone by lack of investor support and withdrawal of previous investment commitments. In March 2009 the RTF was cut from the City’s CBDG funding due to budget constraints and is currently in flux and operationally limited. 17 Prepared by Trinity Investment Capital April 15, 2009
  • 18. LISC San Diego-Helping Neighbors Build Communities City of Chula Vista Community Development will allocate CDBG funding to support pre-foreclosure and foreclosure prevention services. Code Enforcement Division has established foreclosure ordinance that identifies properties very early in the foreclosure process; requires registration, a fee and conformity to code, and when out of compliance, owners faces fines. This code enforcement policy has gained national attention and is being adopted in many jurisdictions. Neighborhood Stabilization Program will provide funding for First Time Homebuyer program to provide $40,000 to $70,000 in assistance for qualified buyers who participate in CHW education and counseling program and some funding for demolition to accommodate redevelopment. B. Private Sector 1. Lending Institutions Private lending institutions maintain properties that are foreclosed in their REO portfolios. Homebuyers and investors can negotiate and directly purchase properties from the institutions through real estate agents. Bank of America/Countrywide: Owner Occupied Proactive Home Retention Program will systematically modify troubled mortgages with interest rate and principal reductions. First-year payments of principal, interest, taxes and insurance will be targeted to equate to 34% of the borrower's income. Modified loans feature limited step-rate interest rate adjustments to ensure annual principal and interest payments increase at levels with minimal risk of payment shock. Modification options include, among others, moratorium of foreclosures; FHA refinancing under the HOPE for Homeowners Program; interest rate reductions, which may be granted automatically through streamlined processing; principal reductions on pay option adjustable rate mortgages that restore lost equity for certain borrowers; and waiver of loan modification fees and prepayment 18 Prepared by Trinity Investment Capital April 15, 2009
  • 19. LISC San Diego-Helping Neighbors Build Communities penalties for subprime and pay option ARM loans owned by Countrywide and its affiliates. Foreclosure Relief Program targets eligible servicing customers who suffered foreclosure or are currently at serious risk of foreclosure having made only minimal payments since the time their mortgages were originated by Countrywide. Will provide support to customers with loans serviced by Countrywide who face imminent foreclosure, providing financial assistance with their transition from home ownership. Some loan modifications will be subject to compliance with servicing contracts and some will require investor approval. Wells Fargo The Bank provided grants to NeighborWorks and other organizations in foreclosure prevention counseling and assistance, purchased Wachovia Bank and World Savings and will absorb the REO portfolios of these servicers, and will offer loan modifications for eligible borrowers. Recently announced an NSP related grants competitive grants program. JP Morgan Chase Chase will cut monthly payments by lowering interest rates and temporarily reducing loan balances. Will offer mortgage modifications for borrowers at risk and institute an independent review process to eliminate all unnecessary foreclosures. The bank will hire and train more staff to handle the added caseload that the plan will generate. In March 2009 the bank opened nine “Housing Centers” to assist borrowers. A site is located in La Mesa, a San Diego suburb. IndyMac/FDIC Loan modifications will be available for most borrowers who have a first mortgage on their primary residence owned or securitized and serviced by IndyMac and is "seriously delinquent" or in default. IndyMac will also work with other consumers who are unable to pay their mortgages because of payment resets or changes in the borrowers' repayment capacities. Interest rates for eligible mortgages would be capped at 6.5%. The modifications would be designed to achieve sustainable payments at a 38% debt-to-income ratio of principal, interest, taxes and 19 Prepared by Trinity Investment Capital April 15, 2009
  • 20. LISC San Diego-Helping Neighbors Build Communities insurance, through a combination of interest rate reductions, extended amortization and principal forbearance. IndyMac will not put any delinquent loans into the foreclosure process during the 90 days it takes to implement its new plan and will institute an independent review process to eliminate all unnecessary foreclosures. Citibank The bank will halt foreclosures for borrowers who live in their own homes, have decent and stable incomes and can make lowered mortgage payments. The bank intends to reach out to 500,000 homeowners who are not currently behind on their mortgage payments (1/3 of all Citigroup mortgages), but who are on the verge of default. Efforts will assist targeted borrowers by adjusting their rates, reducing principal or increasing the term of the loan. 2. Local Developers and Investors a. Hallmark Communities The for-profit development company has purchased foreclosed properties in Chula Vista and has expressed some interest in connecting to nonprofit homebuyer education programs to reach qualified, prospective buyers. The cost of new construction is high and financing nearly impossible. There are signs that there will be an increase in acquisition/rehab transaction in the multifamily sector. b. Investors Current anecdotal knowledge of the market indicates that the Brokers’ Price Opinion (BPO) is $.40 to $.70 on the $1.00. At these low prices, individual investors and investment groups are seizing opportunities to purchase properties for resale and rentals. Purchases of REOs by investors represent a good percentage of current sales in many LMI urban neighborhoods with lower housing prices, access to public transportation, and older homes with unique design features. 20 Prepared by Trinity Investment Capital April 15, 2009
  • 21. LISC San Diego-Helping Neighbors Build Communities B. National and Local Nonprofits National Community Stabilization Trust (the Trust) An unprecedented collaborative effort of LISC, Enterprise Community Partners, the Housing Partnership Network, and NeighborWorks America; the Trust facilitates the transfer of foreclosed and abandoned property from financial institutions nationwide to localities to promote neighborhood stability. Creates a bridge between owners, servicer/REO departments and state and local housing providers and guarantees at least a 15% discount on all real estate purchases made through the Trust. It also offers a “first look” which allows its partners to evaluate and purchase the REO before it is released for general sale to the real estate broker community. Rural Community Assistance Corporation RAC received funding from NeighborWorks America National Foreclosure Mitigation Counseling Program to assist housing counseling agencies in the state to expand foreclosure counseling services to California homeowners at risk. Qualifying agencies—both rural and urban—that participated in the application are receiving sub-grants to strengthen their foreclosure counseling services. Community HousingWorks Founder and member of the HOC, provides financial and homebuyer education and counseling; assistance with connecting to and negotiating loan modifications for homeowners; assist homeowners’ transition to renters. Manages and disburses first-time homebuyer loans for City of San Diego and Chula Vista. The organization is contracted by the City of Chula Vista to offer homeownership education, counseling, and loans for first time buyers purchasing foreclosed homes. Price Charities Provides funding to organizations engaged in financial and homebuyer education and counseling; providing assistance with connecting to, and negotiating loan modifications for homeowners; and assisting homeowners transition to renters. The organization has considered establishing a land bank to purchase, manage, 21 Prepared by Trinity Investment Capital April 15, 2009
  • 22. LISC San Diego-Helping Neighbors Build Communities and sell REO properties in the City Heights neighborhood. The organization’s PITCH Home Loan Program offers assistance for first-time homebuyers in specific City Heights' neighborhoods. Housing Opportunities Collaborative (HOC) HOC Community Partners is the preeminent nonprofit providing financial and homebuyer education and counseling; legal assistance and services; assistance with negotiating loan modifications for homeowners; supportive services such as mental health counseling and emergency financial assistance; and assistance to homeowners making the transition to renters. Member organizations are HUD certified and provide financial and homebuyer education and counseling to qualified buyers of foreclosed properties. Additionally, HOC has been at the forefront of identifying foreclosure fraud scams in target communities and is working with the District Attorney’s office on this issue. The HOC offers comprehensive Foreclosure Home Clinics throughout the region and has been invited to help develop comparable collaborative in other jurisdictions. Union Plus Save My Home Emergency financial aid for AFL-CIO affiliated union members for mortgage payments. Central Labor Council - Labor Participation Agreement Through a Labor Participation Agreement with the United Way of San Diego County, CLC Existing emergency financial assistance for struggling union members and emergency housing assistance program launches in March 2009 to assist union members with up to $1000 for mortgage assistance. 22 Prepared by Trinity Investment Capital April 15, 2009
  • 23. LISC San Diego-Helping Neighbors Build Communities III. Challenges and Gaps to Existing Strategies 1. Lack of access to capital to purchase foreclosed REO properties. The San Diego Capital Collaborative business objective was to bring patient capital to the underserved LMI market. The Collaborative’s major investors, California Public Employees' Retirement System (Cal PERs) and WaMu withdrew from their investment commitments before year end 2008. The NSP funding ($9 million) available from SDHC is not patient capital and is under budget constraints by the city administration to not take undue risk and not add administration for the NSP funds. NSP housing activities are limited to the Housing Commission’s First Time Buyer Program. Most REO single family homes in LMI areas are being “cherry picked” by local investors. There is little desirable REO inventory for homebuyers as the best inventory has been acquired by investors. The investor market dynamic reduces owner occupant transactions thereby reducing neighborhood stabilization. A few nonprofit organizations (NPOs), including CHW, San Diego Community Housing Corporation, Coalition of Neighborhood Councils, and the MAAC Project have well-established relationships and lines of credit with lenders but are facing tightening credit standards in this unstable market. Recommendations LISC can assist with the formation of a locally funded revolving loan pool to access REO asset managers in meaningful transactions. LISC should consider investing low cost, short term loans for the acquisition and rehabilitation of homes to NPOs in NSP areas. Promote and sponsor “NSP informational meetings” to educate local REO holders and sellers about the NSP funds and processes. The NCST- Trust or large REO holders could negotiate REO management by a local nonprofit that would facilitate REO sales by a local nonprofit- Realtor/Broker to ensure that the REO in the NSP target areas would prioritize transactions to local first time homebuyers using the jurisdictions’ NSP 23 Prepared by Trinity Investment Capital April 15, 2009
  • 24. LISC San Diego-Helping Neighbors Build Communities programs. Local “owner occupant” buyers would also get a “first look” at REO and opportunities to purchase properties. Strategically target private foundation, investor, and public agency resources to purchase properties in LMI income neighborhoods with high concentrations of foreclosures. Work with NPOs to negotiate expanded and fixed lines of credit. Work with local and county government to create incentives (i.e. local tax credits, rebates, streamline development review processes, etc.) for private investment into the purchase of foreclosed REO properties for sale to owner- occupants in redevelopment areas. 2. Limited resources for pre-foreclosure and foreclosure/loss mitigation services. Although there is a high demand for the HOME clinics offered by the HOC and its member organizations, there are few resources to support their activities. Recommendations Funding the HOC helps accelerate potential use of the SDHC NSP funds so that they will be able to exhaust the NSP funds before the 18 month deadline. This may position the San Diego to secure additional NSP funds from other jurisdictions that were unable to employ the funds. Work with local foundations to secure resources and create programs that specifically support these services. 3. Some geographic areas lack organizational technical capacity to establish the collaborations needed to expand the impact of strong CDCs. Recommendations Transfer successful programs from initial target areas to these areas. Promote and create incentives for partnerships and collaborative efforts between nonprofits in these communities and those with access to capital, demonstrated capacity and track record. 24 Prepared by Trinity Investment Capital April 15, 2009
  • 25. LISC San Diego-Helping Neighbors Build Communities LISC could target one of these neighborhoods for capacity building funding or support. Recommend keeping strategies along public transit oriented corridors as auto fuel prices will increase again and LMI residents have narrower margin for economic error. 4. Lack of detailed data on foreclosed properties. The San Diego NSP approaches neighborhood stabilization from the macro level, targeting its NSP resources for properties in specific LMI zip codes. To best assess the inventory of foreclosed properties and stabilize neighborhoods, efforts to purchase and sell REO properties must be approached from the micro level and target smaller geographic areas such as blocks. Recommendations The Trust (NCST) offers an opportunity to review and analyze data very early in the REO stage. The data can be utilized to maximize neighborhood impact. Recommend that the Trust provide additional data fields for their REO lists, these include: the approximate value of foreclosed properties, housing type, room count, square footage, year built, lot size, and amenities is needed. Work with local university Real Estate departments to develop GIS information for the NSP areas. Work with local stakeholders, electeds and other nonprofits to gather information on REO properties in targeted neighborhoods. 5. Lack of strong and coordinated leadership – the Mayor and City Council have different priorities and strategies for addressing the foreclosure crisis. Recommendations LISC is a neutral arbiter and convener of diverse stakeholders. A successful consortium could attract leadership and their resources. 25 Prepared by Trinity Investment Capital April 15, 2009
  • 26. LISC San Diego-Helping Neighbors Build Communities 6. Assessing current values of REO properties is challenging. Current sales prices are creating an unstable real estate market. Recommendations Work with local universities to create sale price models that reflect the distress and short sales in the marketplace. The University of San Diego has shown interesting work in sales indexes tied to hedonic regression models similar to those used in Great Britain. Work with the County Recorder’s office, real estate agents, and title companies to track sales. NPOs such as Community Housing Works have developed underwriting reports and criteria for City Heights and Chula Vista where they have housing counseling programs. The methodology used to develop these reports and criteria could be expanded to other communities. 7. One of the potential hurdles the housing agencies face is a federal requirement that bank-owned homes be sold at a discount of at least 5 percent below the appraised value. The overall discount for all homes sold must be 15 percent. Recommendations Fannie Mae will sell its properties at a 15% discount. The Trust –NCST offers at least a 15% discount on their transactions. Other servicers can be encouraged to do so as well. 9. Early detection and outreach to borrowers to offer loan modification assistance. Delinquent borrowers are inundated with collection calls and mail and often give up hope about holding onto their homes. The biggest hurdle is getting people to open their mail to read about modification offers. There is a need in San Diego for a single unified message (branding) to reach homeowners early in the pre- foreclosure process in a compelling, non-threatening manner but there are no financial resources for effective communications. 26 Prepared by Trinity Investment Capital April 15, 2009
  • 27. LISC San Diego-Helping Neighbors Build Communities Recommendations Work with utility companies to develop an early warning data system of households struggling to make payments as this is often a precursor to mortgage nonpayment and foreclosure. Collaborate with community based organizations that are trusted and well- recognized in the community to do outreach. Member organizations of the HOC are well-established housing and service organizations that have daily access to thousands of clients and can perform outreach for pre-foreclosure and foreclosure prevention services. Ask a local television cable company to offer free or near free foreclosure PSAs under a common branding strategy to increase consumer awareness of the HOC and SDHC. The most effective outreach is probably door-to-door contact, generated by early recognition indicators like utility bill late-pays and shut offs. Additionally AmeriCorps interns could affect this work. Work with partners to launch media campaigns through which local and ethnic media make television, newsprint and radio PSAs about available services; all under one label or brand so that the consumers know where there is free, safe and straightforward help. 10. Complicated loans with multiple investors create barriers for loan modification efforts. The majority of troubled loans were packaged into complex investments. Deutsche Bank estimates more than 80 percent of the $1.8 trillion in outstanding troubled loans have been packaged and sold in slices to investors around the world. Experts project that only 20 percent are “whole loans” which will be easier to modify because they have only one owner. Recommendations Given the nation wide orientation of the Trust -NCST should promote the issue in the national arena. 27 Prepared by Trinity Investment Capital April 15, 2009
  • 28. LISC San Diego-Helping Neighbors Build Communities 11. Private investors are taking advantage of the crisis, purchasing foreclosure properties in lower income communities. This reduces neighborhood stabilization and the supply of REO properties in urban communities, it is often the first phase of neighborhood gentrification and eventual displacement of LMI residents. Recommendations Establish and implement the REO NCST management strategy Ask the Trust to work with HUD to prioritize the sale of its REO properties for owner-occupied housing. Prioritize the sale of REO properties for owner-occupied housing. Establish long-term affordability restrictions on properties sold and managed by nonprofits and public agencies. 12. REO properties in lower income, immigrant, and minority communities are often out of compliance with local building codes due to the Illegal additions and home repairs made by owners. Rehab costs associated with bringing properties to code may be higher than projected prior to property acquisition, requiring developers to secure additional subsidies or increase the selling price. Recommendations Work with local real estate agents, partner nonprofits and associated vendors to assess properties prior to purchase. Rehabilitation may be a workforce development opportunity, it could leverage stimulus dollars. Use building codes to negotiate lower purchase costs of REO properties with lending institutions that carry the costs and responsibilities maintaining and bringing properties into compliance. 28 Prepared by Trinity Investment Capital April 15, 2009
  • 29. LISC San Diego-Helping Neighbors Build Communities 13. Current Economic Conditions As more companies layoff workers, the state unemployment rate (currently 10.6%) will continue to rise. For Latinos, the current unemployment rate is 9.7% and African Americans 12.6%. Unemployment benefits are insufficient to cover household expenses for most people, particularly lower paid workers with limited savings and assets. Layoffs are also impacting more mature, educated, and professional workers so foreclosures among these segments of the population are expected to increase as well. The President’s economic stimulus package will potentially create millions of new living wage jobs, career pathways, and provide resources for education, health care, and social services. Transportation expansion and improvement projects (i.e. freeway expansions managed by SANDAG and Lindbergh Airport expansion) will create employment in the building industry for displaced and entry-level workers. Projects and initiatives to reduce energy and water consumption will also stimulate investment and create job opportunities. As these jobs are created, efforts must be made to ensure that they offer wage levels and benefits that enable San Diegans to afford the region’s cost of living. Despite the mortgage foreclosure crisis, home prices are still well out of the reach for many LMI San Diegans. According to a 2007 report by the Center on Policy Initiatives, of the nearly 1 million full-time workers in the county, 57.7% earned an annual income less than $50,000. Another 22% of the region’s workers earned under $25,000. With a median home price of $440,000 in 2007, the Center for Housing Policy calculated that households needed to earn $143,000 a year to afford homeownership. While median prices have fallen to the low $300,000s, households would still need to earn over $100,000 to purchase a home and pay no more than 30% of their income towards housing. Recommendations Encourage safety nets such as the contemplated San Diego LISC “Centers for Working Families” to promote and establish collaborative efforts that connect San Diegans struggling with job loss or reduction in work hours to job search 29 Prepared by Trinity Investment Capital April 15, 2009
  • 30. LISC San Diego-Helping Neighbors Build Communities and placement, training, education, and employment opportunities to help them find new opportunities and maintain or increase their incomes. Link or locate these facilities near community college facilities where users can find free or low cost training. Promote and establish collaborative efforts to link lower and moderate income San Diegans to transit oriented communities. As we saw in year end 2008 when gasoline prices reached peak levels, many renters living on marginal incomes were squeezed out of their housing. Affordable housing (and NSP programs) should focus on transit orientation. The Trust could lobby for federally sponsored mortgage discounts for NSP purchases made within walking radius of a transit corridor or other “green influences”. Focus career training, education, and employment opportunities that will place them on paths to higher paying jobs in growth industries of health care, education, computer technologies, communications, biotechnologies, energy and natural resource management and conservation. Promote and support initiatives that create “green” job opportunities for LMI San Diegans. For example, working with SDG&E and the Water Authority to develop and launch energy and water conservation initiatives that train LMI San Diegans to work for private companies and nonprofits that offer weatherization services to “green” foreclosed homes, other residential, and commercial properties. IV. Mortgage Foreclosure Program and Services B. Pre – Foreclosure/Foreclosure Prevention Early Detection To reduce foreclosures in the region, stakeholders must identify strategies to detect and identify homeowners who are struggling to make their mortgage payments early in the default process. Early detections systems can be established working with utility companies who can track households who are behind in their payments as this is a first sign of the financial trouble that leads 30 Prepared by Trinity Investment Capital April 15, 2009
  • 31. LISC San Diego-Helping Neighbors Build Communities to foreclosure. Additionally, utility and postal workers servicing target neighborhoods can be trained to identify the early signs of homeowner distress and make available the information for the nonprofit sector for follow up on a face-to-face basis Outreach to Homeowners Community-based organizations, faith institutions, and other entities recognized and trusted by the community can perform outreach homeowners facing default and foreclosures through their services and programs, recruiting them to receive counseling and assistance. Loss Mitigation Homeowners referred by nonprofit organizations can be referred to Level I and Level II counseling offered by community partner organizations of the Housing Opportunities Collaborative (HOC) and their loan servicers to help them avoid foreclosure. Level I counseling will involve credit repair, budgeting, and debt management. Level II counseling will assist homeowners navigate the complex process of negotiating loan modifications, providing assistance with short- sales, moving through the foreclosure process, and transitioning to rental housing. Supportive Services and Workforce Development As homeowners receive Level I and/or Level II counseling, they will receive any needed supportive services such as legal guidance and assistance, mental health counseling, emergency financial assistance, job referrals and placement, and assistance with applying for public benefits. Unemployed homeowners will be referred to organizations such as the HOC community partners, and other entities for job search and placement assistance. Referrals and Assistance with accessing rental housing After counseling, homeowners who face foreclosure will be referred to HOC community partners to receive assistance with searching for and applying for rental housing. 31 Prepared by Trinity Investment Capital April 15, 2009
  • 32. LISC San Diego-Helping Neighbors Build Communities Financial education and counseling for homeowners Homeowners who are able to avoid foreclosure will be referred to HOC community partners to participate in financial education programs and receive individual financial counseling to ensure they develop the knowledge and skills needed to effectively manage their money and maintain homeownership. B. REO Properties: Proposal for a San Diego NCST Trust Strategy – A First Look Program for Owner-Occupants The San Diego First Look program envisions a pilot program where a local nonprofit is contracted to manage a servicer’s REO portfolio of housing units located in the San Diego NSP target areas. Under this proposal, the REO owner or manager will contract a vetted nonprofit to manage the sale of the REO inventory in the NSP target areas instead of a Realtor with no vested interest in the stability of the community. This conceptual program would allow consumers in target areas to get a “first look” at REO inventory before release to the general Realtor market. This no-cost model maximizes community stability by allowing a specific entity to manage the real estate transactions with priority for NSP users and owner-occupants in lieu of investors Furthermore, additional first look purchase opportunities would be extended to local nonprofit development entities in NSP areas such as the Jacobs Center for Non-Profit Innovation, Coalition for Neighborhood Councils, and Price Charities. A protection could be added to ensure investors are allowed to buy after an initial 45 to 90-days of offering to the NSP owner-occupant class. This concept could be piloted and be successful in San Diego owing to the strength, local connectivity and experience of the nonprofit sector. There is early discussion at this time to create a local capital consortium. The very preliminary outline includes: Multiple collaborative funders to the capital pool Operational target funding would be in the $2 to $4 million range One entity (LLC) would facilitate the REO transfers and provide loan servicing 32 Prepared by Trinity Investment Capital April 15, 2009
  • 33. LISC San Diego-Helping Neighbors Build Communities The loan pool would be a revolving credit facility. Properties would be NSP targeted and tied to the NCST or other major REO owner with minimum 15% sales discount. Target consumers are at <120% AMI. The geographic targets are likely to be the Tier I neighborhoods cited in this report. Leverage of local dollars to subsidize those at the lowest incomes. Primary focus to insure long term housing through use of the NSP. Low-and- Moderate-Income and NSP market activity appears to be escalating creating increasing competition with the investor class. The City Heights market is now a hot market. This economic tension is driving early stage discussions and willingness to work collaboratively to fund a consortium. The NCST business plan is now appearing much more realistic especially as stakeholders keep losing every REO bid. San Diego has the human and social capital is highly operational ISC leadership and support could be the unifying force to create the initial core group of investors whose success will encourage other stakeholders to join. This report demonstrates that the San Diego market has enormous human capital dedicated to the crisis but has little financial capital and agencies are under increasing budgetary constraints. Given the tenor of the recessionary economy, resilient thinking and collaborative actions appear to be the norm into the unpredictable future. 33 Prepared by Trinity Investment Capital April 15, 2009
  • 34. LISC San Diego-Helping Neighbors Build Communities Chart A. Pre – Foreclosure/Foreclosure Prevention Utility Companies/Postal workers Early City Code Enforcement Detection Property surveys (nonprofits) Private Lenders 211 calls for assistance Referrals and Loss Mitigation Assistance with accessing rental Outreach to Level II Counseling Level I Counseling housing Homeowners Credit Repair Loss Mitigation/Support and CBOs Budgeting Assistance with Short- FBOs On-going financial AmeriCorps Debt Sales/Foreclosure education and HOC counseling for HOC Partners Partners homeowners Supportive Services and Workforce Development Legal, Mental Health Counseling, Emergency Financial Assistance, Job referrals and placement, Public Benefits Advocacy and Assistance, etc. HOC Partners   Labor Partnership Agreement AFL-CIO Union Plus Save My SD Workforce Partnerships Public Agencies 34 Prepared by Trinity Investment Capital April 15, 2009
  • 35. LISC San Diego-Helping Neighbors Build Communities Chart B. REO Properties: San Diego NCST/ NSP/ REO Strategy Servicer Servicer Servicer Servicer Servicer Community Housing National Community Stabilization Trust Works or CDC (TBD) Facilitates transition of REO properties in targeted Manage and Sale properties as REO Property Broker in all NSP and NCST neighborhoods from private brokers to qualified target areas NPOs and direct sale to SDHC San Diego Jacobs Center for Non-Profit Price Housing Innovation/Coalition for Charities Commission Neighborhood Councils Potentially buy or 20 – 30 units of REO Potentially buy or manage and manage and properties in target NSP rehab REO properties in rehab REO properties neighborhoods Consumer First-time Homebuyer Programs and Local Capital Collaborative HOC, OTS, Rebuilding Together, Others 35 Prepared by Trinity Investment Capital April 15, 2009
  • 36. LISC San Diego-Helping Neighbors Build Communities   V. NCST Target Communities The Trust and organizations participating in the continuum can focus on several communities in the region to pilot the model for foreclosure services delivery and Trust activities. Communities will be selected for the pilot based on the following criteria: Percentage of residents who are LMI income. Numbers of REO Properties. Numbers of NODs and Trustee Sales. Priority for local government NSP and other stabilization programs. Community Capacity: Network of CBOs, faith-based, civic associations, academic institutions, business associations, etc. with: o Access to capital and successful track record of real estate management, development, rehabilitation and sales. o Track record of effective community outreach and engagement. o Established and successful financial and homeownership education and counseling programs. o Established legal, mental health, emergency assistance, workforce development, and other support services programs. o Track record of successful collaborative efforts and resource leveraging. Political will and support for community stabilization initiatives from elected officials and other leaders. Close proximity to public transportation routes (buses, trolley, train, etc.) to promote and facilitate longer-term transit-oriented development initiatives. Targeted for redevelopment by local government. Prepared by Trinity Investment Capital   April 15, 2009 36
  • 37. LISC San Diego-Helping Neighbors Build Communities   A. Tier I Communities The City Heights neighborhood of San Diego and Logan Heights meet all the criteria identified above and are recommended as targeted communities for potential NCST activities. 1. City Heights Criteria Community Profile % of residents who are LMI income. Nearly 80% of residents are LMI Numbers of REO Properties. 126 (Bouton and Associates, 2008) Numbers of NODs and Trustee Sales. 306 (Bouton and Associates, 2008) Priority for local government NSP and Targeted by the City of San Diego for other stabilization programs. the NSP Community Capacity Community Housing Works Price Charities, OTS, SDCHC City Heights Foundation Episcopal Community Services Political will and support for Todd Gloria supports neighborhood community stabilization initiatives stabilization strategies. from elected officials and other leaders Close proximity to public Extensive bus lines run throughout the transportation routes (buses, trolley, neighborhood connecting to Downtown, train, etc.) to facilitate longer-term Mission Valley, trolley lines, and the Transit-Oriented Development Amtrak and Coaster trains. Targeted redevelopment areas Price Charities and City Heights Foundation Prepared by Trinity Investment Capital   April 15, 2009 37
  • 38. LISC San Diego-Helping Neighbors Build Communities   2. Zip Codes 92102, 92113 (Logan Heights, Sherman, Barrio Logan) Criteria Community Profile % of residents who are LMI. Near 80% Numbers of REO Properties. 128 Numbers of NODs and Trustee Sales. 325 Priority for local government NSP and This area is two of the target NSP zip other stabilization programs. codes Community Capacity Community Housing Works MAAC Project Children of the Rainbow SDOP and JOB LISC Neighborhoods First area Political will and support for The 8th Council District representative is community stabilization initiatives president of the council and veteran from elected officials and other member of the City Council. He has leaders already designated funds for foreclosure Close proximity to public Trolley runs through the community transportation routes (buses, trolley, connecting it to downtown, Tijuana to train, employment, etc.) to facilitate the South and all coastal communities longer-term Transit-Oriented and other trolley, trains and bus lines to Development major employment, retail, and entertainment centers. This trolley line is historically the most heavily used in the county Targeted redevelopment areas This area is in alignment for continued development as the downtown core expands eastward. The Comm22 mixed use project (budget $130 million) is near ground breaking Prepared by Trinity Investment Capital   April 15, 2009 38
  • 39. LISC San Diego-Helping Neighbors Build Communities   B. Tier II Communities 1. Southeastern San Diego Criteria Community Profile % of residents who are LMI. Approximately 75% of the residents are LMI. Numbers of REO Properties. 95 Numbers of NODs and Trustee Sales. 280 Priority for local government NSP and Targeted by the City of San Diego as an other stabilization programs. NSP area. Community Capacity Jacobs Foundation is well capitalized and has expressed interest. Coalition of Neighborhood Councils has secured a line of credit to purchase foreclosed properties. Political will and support for City Councilmember Young is community stabilization initiatives supportive of the proposed local NCST from elected officials and other strategy. leaders Close proximity to public Trolley runs through the community transportation routes (buses, trolley, connecting it to employment, business, train, etc.) to facilitate longer-term and entertainment centers to the west. Transit-Oriented Development Targeted redevelopment areas The Southeast Economic Development Corporation (SEDC) develops affordable housing and revitalized neighborhood commercial districts. Prepared by Trinity Investment Capital   April 15, 2009 39