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To borrow from Dickens, “It was the best of times; it was the worst of times.” That’s what it has felt like in Sarasota County over the past decade.
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Sarasota County is located on Florida’s gulf coast of Florida, about 60 miles south of Tampa and 100 miles north of Naples. Over the last 10 years, the county has seen the rapid rise and fall of its economy and employment. The “best of times” saw Sarasota County’s population grew from 325,927 in 2000 to more than 380,000 by 2008. During this same period, the countywide taxable value increased from $21.9 billion to $62.7 billion. And, for the most part, people who wanted to work were able to find work. In 2006, the unemployment rate in Sarasota County reached a yearly low of 3.1 percent, and a monthly low of 2.6 percent in December 2005. These were, indeed, the best of times.
Like many communities across the country, Sarasota County is experiencing a fall from an unsustainable rise in property valuations. Hand in hand with lower real estate values is an impact on jobs and the associated rise in unemployment. While the best of times saw the countywide taxable value increase 186 percent in seven years, it is now the worst of times since the countywide taxable value has declined about 25 percent from the peak. Also, Sarasota County’s current annualized unemployment rate for 2009 is 10.7 percent – 11.4 percent in June alone — as reported by the Bureau of Labor Statistics. The monthly unemployment rate in Sarasota County has increased more than 300 percent from its lowest point in December 2005.
The residents of Sarasota County have seen their property values rapidly decline, while employment opportunities dwindle and residential foreclosures reach unprecedented levels. In these dire times, creating opportunities by identifying the skills and resources available, finding new resources and inspiring residents and the community as a whole to take action in minimizing – and reversing — the effect of the downturn.
While in these tough economic times it is difficult to create and develop these new opportunities. Thus there has been a focus to capitalize on the already available resources, and to build synergies and efficiencies that otherwise have not existed. The foreclosure disaster has three recognizable stages, in which there are distinct opportunities to help residents and the community as a whole: pre-foreclosure causes, the foreclosure process and post-foreclosure events.
Pre-Foreclosure
In the pre-foreclosure stage, a homeowner could begin to fall behind in his/her mortgage obligations, or has recently fallen behind. During this stage, the opportunities to focus on are preventing foreclosure and raising community awareness of the options to permit citizens to stay in their homes. The key objectives at this stage are to encourage homeowners to become proactive and begin to responsibly take action to address their situation. Homeowners must be provided with comprehensive, trusted and reliable information.
Through feedback from local credit counseling agencies, other nonprofits and the courts, it was made clear that most homeowners have done very little to address the crisis they are facing. This occurred, in many instances, because the crisis was primarily emotional and deeply personal; financial considerations came second. Without coming to terms with the situation in front of them, homeowners were unknowingly moving toward foreclosure without any understanding of available options. If a homeowner can become empowered with knowledge and resources, then they can be proactive and control their outcomes in this disaster-like situation, giving them a better chance of staying in there home.
| “One way we can do this is as a facilitator, bringing together residents in crisis with professionals and agencies which can provide individual assistance.”
- Chair of the Sarasota Board of County Commissioners, Jon Thaxton
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From a resolution adopted by the Sarasota Board of County Commissioners, a resource network was created to help find fast, effective, positive resolutions for households in crisis. The creation of this resource network arose from a partnership of service providers, legal and real estate experts, and has the support of the other local governments in Sarasota County. The network is reinforced through a Web site, www.scgov.net/homehelp and a printed resource guide loaded with information, directions, and resources, call center contacts to inform citizens how to use the network.
The success of this resource network is predicated on its being a trusted source of information and delivered free to anyone who wishes to use it. A culmination of the resource network’s efforts came on Aug. 1, 2009, in the first of a series of housing seminars. The seminars called “Hope for Homeowners” are designed to introduce the resource network to residents so they may better understand their situation, the foreclosure process and their options. The resource network and the seminars also address the other two stages, what to do if in the foreclosure process or have already been foreclosed. In order to be effective the resource network must address all three stages of foreclosures.
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Resource Network Services and Initiatives
- Comprehensive assessment; counseling for credit, housing and foreclosure prevention; and case management
- Legal counseling, loss mitigation, alternatives to foreclosure, financial gap assistance, court conciliation
- Post-foreclosure consultation, rent and mortgage assistance, relocation services, emergency food and shelter
- Hope for Homeowners seminars
- Comprehensive Web site
- Printed Resource Guide
- Central communication points to reach network partners
- Speaking engagements
- Panel discussions
- “Law at the Library” presentation on foreclosures
- Direct Assistance funding
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Foreclosure
The foreclosure stage begins when the homeowner has received a legal notice of foreclosure. Upon receipt of this notice, the homeowner has a specified period of time to respond to the court. Among the most common reasons that cause people to fall into foreclosure are a loss of job or reduction in pay, and substantial medical expenses, all of which may be difficult to overcome. As the number of foreclosure cases continued rising in 2008, the judges noticed a trend emerging; a high percentage of homeowners were not responding to the legal notice of foreclosure. The reasons varied, but the troubling issue in a number of these cases was that homeowners in owner-occupied houses had legal standing to stay in their homes if they had shown up to present their case. As a result of this inequitable situation, the chief judge of Sarasota County’s Judicial District, Lee Haworth, issued an administrative order requiring a conciliation meeting between homeowners in owner-occupied houses and the lender holding the mortgage lien before
| “Foreclosures have serious consequences, including a decline in the health of neighborhoods…. The situation is not hopeless and borrowers who seek professional advice and work with their lenders can vastly improve their opportunity to achieve a resolution.”
– Chief Judge Lee Haworth
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the legal process of foreclosure could begin.
Sarasota County began a coordinated effort with Chief Judge Haworth and others in the legal community to produce a series of videos to inform citizens of the foreclosure process, the situation of foreclosures in the judicial district, and the intent and effect of the administrative order on foreclosures. These videos are posted on the resource network Web site at www.scgov.net/homehelp/VideoHome.asp, and copies are distributed throughout the community. Furthermore, the resource network incorporating free legal aid services for those in the foreclosure stage. However, it is a fundamental principle, through the resource network any legal services are provided without charge. Legal information about foreclosures can be some of the most valuable information for homeowners facing the situation.
More legal information was provided at the Hope for Homeowners seminars with a series of breakout sessions that focus on specific situations of the foreclosure process: short sales; foreclosure or deed in-lieu; bankruptcy; and credit management and repair. Based on observations and survey responses of event participants, the seminar was overwhelmingly successful at providing information to the attendees; one of the most frequent comments from attendees was a desire to see more events like this available to the community.
Post-Foreclosure
The post-foreclosure stage has two key issues to address: the relocation for homeowners who have lost their homes to foreclosure, and the impact of having a large number of vacant foreclosed properties within a neighborhood. The issue of relocation is also a component of the resource network. The message to share with them is that hope is not lost and you can recover from this life-changing event.
The resource network has incorporated this message throughout each stage, so as to ensure the homeowners can maintain their dignity at this challenging time. Moreover, important resources for people in the post-foreclosure stage are to know where to go to fulfill their basic needs, and what to do when to they become foreclosed and have to leave their home. In this case, the situation becomes much like a disaster relief response where the coordination of resources is vital to the survival of the victims of the disaster. The resource network also includes service providers who can assist homeowners with housing options if they have been foreclosed. Fortunately, with the vast amount of the foreclosures in the system, the foreclosure process is taking quite a long time to complete, which gives homeowners an opportunity to prepare themselves for the inevitable. This creates an opportunity for those affected to prepare by understanding how the foreclosure process will work, what will happen after they are foreclosed, and how they can begin rebuilding the futures after the foreclosure is complete.
The high amount of foreclosures in Sarasota County has continued since 2008, and more and more the continuation of homes foreclosing is putting a strain on the community, the neighborhoods and citizens. With the demand for buying a home and the ability for people to purchase a home at all-time lows, many homes and lots are unoccupied or vacant. This is a great opportunity to encourage the redevelopment of residential housing to improve the efficient operation and sustainability of a home. While taking advantage of this opportunity may require using new funding sources to get programs and strategies implemented, this appears to be an opportune time to prepare for all the various processes that will be needed to allow any potential widespread redevelopment to take place. An example of such a Sarasota County program is the Neighborhood Stabilization Program, (www.scgov.net/nsp), which is creating an opportunity for housing of displaced families, through a rental component.
In closing, many factors went in to the creation of this situation; whereas, many of these factors were beyond the control and foresight of the citizens, government, private and nonprofit sectors and elected officials. The future success of the community will rest in part on its ability to respond and take advantage of the opportunities from these disaster-like times.