Foreclosure tour leads to Bridgeport

April 13, 2009; As originally appeared in the Connecticut Post

BRIDGEPORT -- The U.S. secretary of Housing and Urban Development and U.S. Sen. Chris Dodd toured foreclosure disaster sites in Connecticut Monday to see where millions in federal dollars will be going. "We are really trying to turn the Titanic around," Joan Carty, president and chief executive officer of Housing Development Fund Inc., told Dodd, chairman of the Senate Banking Housing and Urban Affairs committee, and HUD Secretary Shaun Donovan, of the difficulty her group is facing in Bridgeport.

HDF is administering a $6 million federal fund for Bridgeport that will be used to help homeowners buy foreclosed and abandoned properties and make them habitable again. The federal government is pouring billions of dollars into housing programs across the country.

Dodd and Donovan met with about 40 people in HDF's Broad Street office to discuss what they are encountering as the group not only tries to put foreclosed properties back in the hands of homeowners but also aids in the fight to keep people in their homes. They hit Bridgeport because more than 1,000 homes have been foreclosed in Bridgeport, where more than 5,000 subprime loans were issued.

Before their Bridgeport stop, the duo was in Hartford for a housing forum and stopped in New Haven, where they met with homeowners who have been helped by programs there.

Carty said the group is already implementing its plan, which focuses on several neighborhoods, including the one by St. Vincent's Medical Center. She said HDF and its partners have started to work with the hospital, in particular, to encourage its staff to buy foreclosed homes in the area. But Carty said the group is in desperate need of housing counselors to field inquiries, with 70 coming just the first week the group unveiled the program, a little more than a week ago.

Dodd said if there's one message he could deliver to residents after the tour it's "People don't have to feel alone in this." He said the earlier homeowners seek help with their problems paying mortgages, the better chance they have of staying in their homes. But he also said he has no illusions that every family will be able to stay in their homes and that's why the program includes the creation of affordable rental housing, through the purchase of these foreclosed properties.

Donovan noted people should not be paying for housing counseling.

The tour itself was timely in that a number of major lenders have lifted moratoriums on foreclosures, which could touch off another tidal wave of foreclosures across Connecticut. Fannie Mae, Freddie Mac and several major banks, including IndyMac, have lifted their moratoriums this month.

"We need to stop them," Donovan said of foreclosure, not have a temporary halt.

Donovan laid out the basic plan to deal with the housing crisis on Monday. He said it involved lowering interest rates, modifying mortgages and making sure people can get credit. But he said the problem goes beyond housing.

"While it started as a housing problem," Donovan said, "It has evolved into a broader economic crisis... We have to focus on jobs."

Researchers at the Federal Reserve Bank of Boston published a paper this month identifying job loss as critically affecting the foreclosure crisis, even more so than the idea of banks being unwilling to modify mortgages.

Much of the visit was closed to the press, as Dodd and Donovan met with Bridgeport Mayor Bill Finch, Carty and other housing advocates. But before that part of the tour, Dodd fielded questions outside HDF's office about recent polls showing him behind a cadre of challengers.

"I didn't get elected to get re-elected," Dodd said, adding it was too early to worry about the polls, especially with all the work facing Congress in this economy. Dodd said he understands public anger over bank bailouts and particularly bonuses being paid to AIG workers, when that company has taken billions in taxpayer money.

But not everyone in the public is angry with Dodd.

"Senator Dodd for president! Mayor Finch for vice president!" shouted Scott Richard Plaveck during the press conference. Plaveck, a Bridgeport resident who has fallen on hard times but is able to rent a room, said Dodd "is what this country needs."

Finch, who made it late to the press conference, called criticisms of Dodd's part in the economic meltdown "unfair." Dodd has been hammered for taking political contributions from banks and financial companies, even as the committee he chairs now tries to create new regulations to curb the excesses in those industries that contributed to the current economic meltdown.

Finch noted that Dodd's Democratic Party wasn't in power during much of the 1990s when some of these problems occurred.

Dodd has been a U.S. senator since 1980. Before that he served three terms in the House of Representatives.