Tackling Foreclosures in Philadelphia

Mayor Nutter announces good news about Philadelphia’s foreclosure prevention program, but skeptics wonder whether the initiative’s clunky name spells trouble.

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It’s awkward to see a city pat itself on the back, especially in the current economic climate, but Philadelphia seemed to manage it last Tuesday. Spirits ran high in City Hall as mayor Michael Nutter and other municipal VIPs congratulated the city for raising $275,000 towards its foreclosure prevention program, enabling the fledgling initiative to continue for at least another six months. But while Nutter hailed it as “another wonderful day in Philadelphia,” the snowstorm brewing outside provided some needed irony.

The Philadelphia Foreclosure Prevention Program (PFPP) might not have the most imaginative name, even as government initiatives go—Nutter poked fun at
its unoriginality and encouraged the audience to practice repeating the tongue twister—but the innovation it lacks in naming, it makes up for in strategy. As the result of a court order issued by Chief Justice Annette Rizzo last June, no house in Philadelphia can be sent to a sheriff’s sale before the owner-occupant’s has had a the chance to rework the terms of their loan through a conciliation session with their lender. In addition, the initiative provides door-to-door outreach, an information hotline, and free housing counseling to those in danger of defaulting or becoming delinquent on their debt. $5.3 million from the public sector and now another quarter million flowing from private sources, the Mayor says, show Philadelphia cares about bailing out individuals, not just institutions. So far, this average-Joe philosophy has been paying off: Since its start last summer, officials say, the initiative has kept 603 families on the brink of foreclosure away from harm and in their homes.

But as skeptics repeated the name ten times fast, they may have begun to wonder whether the program’s original title, the Mortgage Foreclosure Diversion Program, might have been not just easier to pronounce, but more appropriate. It is, after all, a good-sized leap from diversion to prevention, and after just seven months of operation, it might be too soon to tell whether the affected families have truly escaped foreclosure or simply forestalled the inevitable.

So the judge might have issued the order, the banks and lawyers might have lined up behind it, and the mayor has arrived to shake all their hands, but the jury is still out: Will PFPP offers lasting financial solutions to families facing foreclosure, or is it just a temporary Band-aid on a still hemorrhaging wound?

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Tags: philadelphia

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