Reshuffle Deck at Home Equity
Committee Seeks Referendum To Provide Loans for Foreclosures
The seven-member volunteer commission that oversees the Southwest Home Equity Assurance Program had a change of venue for its monthly meeting last week, partly to honor the first change in leadership the commission has had in more than a decade.
The group usually meets in the Home Equity office at 5334 W. 65th St., but the Sept. 10 dinner meeting convened a few blocks away, at Dempsey’s restaurant, 6522 S. Cicero Ave., in Bedford Park.
The reshuffling of offices does not affect the membership of the commission, which is done by mayoral appointment. But Linda Dougherty, retired head librarian of the Clearing Library, was elected chairman of the commission, taking over from Anita Cummings, who held that post for the past 14 years.
In other moves, James Capraro, executive director of the Greater Southwest Development Corp., became vice chairman of the commission.
His former position as treasurer is now in the hands of attorney Daniel Malone, who has been on the board since 1989, and previously served as chairman.
West Lawn real estate broker Jean Lopez is the secretary.
Cummings, Joseph Loduca, DDS, and Armon Schmidt are remaining on the commission as well.
Cummings, consultant and executive director of the United Business Association of Midway, was presented with a plaque and bracelet at the meeting in appreciation of her years of service to the organization.
She admitted afterward that she was surprised, and even a bit disappointed, that she was not retained as chairman at least for one more year.
“This was the first year that anyone showed any initiative,” she said.
But she added that she plans to remain very involved on the board.
The coming year is expected to be busy for the commission, especially if a referendum seeking support for a plan to make short-term loans to qualified homeowners at risk of losing their property through foreclosure is approved.
The funds would be borrowed from the $12 million guarantee fund the commissioners oversee for the district that encompasses all or part of 13 neighborhoods on the Southwest Side.
Its borders are erratic, but it takes in an area between Ashland and Harlem avenues, and the Stevenson Expressway to 79th Street.
A similar, smaller program serves an area farther south, between 79th and 87th streets, Western to Cicero avenues.
The program was created by state statute in 1988 to protect property values, and the funds are generated from property tax levies assessed on homes in the district.
The money is meant to reimburse program members who have had their properties appraised and after staying in the program for at least five years, cannot sell their home for the appraised value.
The referendum to appear on all ballots in precincts within the district states “Shall the Southwest Home Equity Program implement a Foreclosure Prevention Loan Fund with money from the guarantee fund of the established guaranteed home equity?”
A few years ago, the program began offering small, no-interest home-improvement loans to residents. And this would be an outgrowth of that.
Capraro, who is credited with coming up with the idea for the short-term loans for homeowners facing possible foreclosure, said it is seen as a way to prevent more foreclosures in the area, which has led to a plethora of boarded-up properties in some neighborhoods.
He said last week that the specifics of how the program would operate are still being worked out, but he envisions it being targeted at people who have adjustable mortgages but have not gone into foreclosure yet.
“Once you are foreclosed, it is almost impossible to get out,” said Capraro, who said the idea is to help people before they get to that point.
He envisions being able to give short-term loans to homeowners facing unaffordable increases in their adjustable mortgages, until they could get the home refinanced into a conventional loan.
“The money would be paid back when the home is remortgaged,” he explained.
During his treasurer’s report, which went over how the funds are invested, Malone said, “We’re in excellent shape as we have been all along. Our revenue well exceeds our expenses.”
The program has money available largely because the commission has seldom had to reimburse homeowners for the difference between their appraisal and selling price, since property values have increased over the years.
It was noted at the meeting that payouts have only been made 12 times in the program’s 20-year existence, and the last one was in 2000.
But this year already one West Lawn homeowner has begun the process of seeking reimbursement because he is having trouble selling his home. Applicants must follow specific steps before payouts are made, including listing their property for a certain percentage above the appraised amount.
Executive director Ken Pannaralla informed the board that the seller did that already, and did not get any offers, so the board agreed to go to the next step and allow the asking price to be lowered to the appraisal amount.
Capraro also requested that an appraiser work on doing a complete analysis of how property is selling in the area.
It would appear that the commission can afford to give the loans, but Malone, Cummings and others at the meeting cautioned that with the downturn in the economy, there could be more applications for reimbursements coming.
Lopez said many prospective homebuyers are unwilling to buy just yet because they are expecting prices to come down further.
Asked how she thought the referendum would be received, Cummings just said, “Let’s just see how it goes.”
She said that if it is approved, in light of the present shakiness of the economy, particularly in the real estate market, she said any loan program should be tightly controlled.
“If it does pass, the board needs to be extremely conscientious about monitoring it. Our first responsibility is to the taxpayers,” said Cummings.