Eileen Feliciano, a Community Renewal Team financial literacy coordinator in Hartford, Conn., is standing in a CRT meeting room, doing something that sounds like preaching.
“There’s no such thing as ‘I cannot save,’” said Feliciano. Then she ticks off the multitude ways to put money aside, including collecting change in a jar, cutting back on restaurant coffee, and avoiding debit cards.
Members of her small crowd at this “lunch and learn” session nod. They’re here for a variety of reasons. Some want to save to buy a car. Some just want to be able to meet their bills at the end of the month.
And some plan to go big, and buy a home.
In Connecticut, that last goal is particularly challenging. There’s the mortgage approval process (rarely pleasant) but then there is the specter of foreclosure, a real threat in Connecticut, which ranks eighth in the country for housing costs, according to the National Low Income Housing Coalition.
Even with the recession behind us, a recent study put the state fifth in the nation for foreclosures. According to ATTOM Data Solutions, which compiles property information, in Connecticut, one in 128 properties was in foreclosure by the end of last year. Nationally, 676,535 properties were in some stage of foreclosure last year, down 27 percent from 2016. (Foreclosures include default notices, scheduled auctions and bank repossessions.)
The company has collected foreclosure data since 2006, and this year’s is the lowest rate nationwide, but Connecticut continues to struggle. In the state, Hartford County has the most scheduled year-end foreclosure auctions in the state, with 586, followed by:
- New Haven – 501
- Fairfield – 433
- New London – 162
- Litchfield – 139
- Middlesex – 74
- Tolland – 53
- Windham – 52
Why so many foreclosures? Beyond high housing costs, Connecticut and the rest of the region has been haunted by slow job growth, though a recent report from the Federal Reserve Bank of Boston painted a mostly positive picture. From the report, four of the region’s six states – Massachusetts and Connecticut excepted – saw declining unemployment rates in the last quarter of 2017. (Connecticut also has an unemployment rate larger than the national average – or 4.6 percent compared to 4.1, respectively.)
Foreclosures haunt homeowners around the region. In Massachusetts, municipalities use for-profit companies to go after homeowners who are behind on their tax payments. In the last four years, one company more than doubled its rate of foreclosures, says the New England Center for Investigative Reporting.
In Maine, where, as in Connecticut, foreclosures must go through judicial reviews, market watchers have seen a five-year drop in foreclosure proceedings. In New Hampshire, one in every 3,845 properties is in foreclosure proceedings – lower than the national average, according to RealtyTrac. From the same source, Rhode Island’s foreclosure rate is 1 in every 3,352.
Alfred Herger came to Hartford’s CRT in March 2016 after working for mortgage companies in Texas and Florida. Now, he works with clients to make sure they don’t lose their homes. He considers himself a member of the other team.
“You need to understand the other side to be an advocate,” Herger said. That can make him a formidable negotiator for clients anxious to keep their homes.
“Say you lost your job, your company downsized, and you’ve got a pension that doesn’t kick in right away,” he said. “Does your wife work? That’s a plus. You can begin to look for a job, and calling the bank. You’re not behind yet.”
The issue is exacerbated when clients wait too long to ask for help, Herger said.
“It’s the 11th hour, and they’ve exhausted all kinds of things, including depleting their retirement funds, which is a very bad thing in order to try to save their home,” he said. “And so part of what we do is a financial analysis to see if in fact at their current income they can maintain the house. Sometimes, you have to tell them no, that dog don’t hunt. Then you’re dealing with helping people transition — mostly emotionally — from their own home to another dwelling.”
During a recent state budget crisis, a program that helped qualified Connecticut families who were in arrears called the Eviction/Foreclosure Prevention Program, was cut. CRT was one of the program’s administering agents.
Elizabeth Horton Sheff, CRT’s community services director (and the Sheff behind the historic education court case, Sheff v.O’Neill), runs an eight-hour pre-purchase class to help would-be homeowners understand their ability to pay back their mortgages.
“Sure, you want the house with 16 bathrooms and a sauna and 32 bedrooms, sure you do,” said Sheff. “But can you afford that?”
Keeping people in their houses goes beyond individual family economic success, said Herger. According to a 2010 Connecticut Office of Legislative Research report, foreclosures put a burden on the rental market, and can put pressure on municipalities to provide services for displaced families. In addition to lowering surrounding property rates, foreclosures are often accompanied by an increase in crime.
A 2015 Department of Justice report said that an increase in foreclosure proceedings in a neighborhood is often accompanied by an increase in violent and public order crimes. (Public order crimes include drug crimes, prostitution, and public drunkenness.) The report said that crime tends to increase during a property’s transition to bank ownership. This happens, in part, because owners have little incentive to maintain the property. That spills over into surrounding blocks. Foreclosure spreads, like a virus.