News
News
Excitement Builds as the 24:1 Initiative Community Plan is Completed!
May 25, 2011
The 24:1 Initiative is an innovative collaboration between Beyond Housing, Normandy School District and the 24 municipalities that comprise Normandy School District including elected officials, residents, community-based organizations and area businesses, to create a fertile environment for community revitalization from within the community itself. The 24:1 Initiative Community Plan is the result of months of efforts by stakeholders coming together to identify ways to build on their communities strengths and address common issues.
The stakeholders within the target area chose the name 24:1, twenty-four communities with one vision. That vision is strong communities, engaged families and successful children.
To learn more about the 24:1 Initiative or get involved, click here.
Study Finds Counseling Increases Chances for Loan Modification
Apr 27, 2011
Homeowners who participate in default counseling are more likely to have their loans modified, according to a study released Tuesday by the Mortgage Bankers Association (MBA).
According to the trade group’s report, policymakers have increasingly turned to education and counseling as a means to help borrowers succeed as homeowners and to remedy problems that impede their ability to make their mortgage payments.
Homeownership education and counseling has existed in the United States for over four decades, according to the report, however the scope of these services began increasing dramatically only recently. In 2010, housing counselors from HUD-approved agencies provided one-on-one assistance to some 1.4 million homeowners at risk of foreclosure.
About one-third of those counseled pursued a solution related to sustaining homeownership, such as forbearance, refinancing, modification, or reconciling delinquent payments, according to the report. HUD data suggest counseling agencies were involved in more than 301,000 loan modifications last year.
Data from federal regulatory agencies indicates that about 1.7 million loan modifications, including permanent and trial period plans, began in 2010. This means counseling conservatively played a role in about 17 percent of modifications, MBA’s researchers explained.
Of those counseled last year, HUD data shows that 2 percent were foreclosed on and 3 percent declared bankruptcy.
MBA’s study entitled, “Homeownership Education and Counseling: Do We Know What Works?”, was conducted by J. Michael Collins and Collin O’Rourke of the PolicyLab Consulting Group and sponsored by MBA’s Research Institute for Housing America (RIHA).
While the data suggests that counseling leads to an increase in loan modifications and a decrease in delinquencies and foreclosures, the researchers say caution is warranted when interpreting these results. They stress that assumptions may be biased simply because people who choose to participate in default counseling to save their home “almost certainly differ” from people who do not.
Still, the researchers at RIHA concluded that it’s safe to say homeowners who opt for foreclosure prevention counseling stand a better chance of receiving a modification, even if it is because they are more ambitious when it comes to finding a solution.
While post-default counseling has been found to be effective in turning willing, delinquent homeowners back into paying, on-time mortgage borrowers, MBA’s study found that the success rate of pre-purchase education provided to homebuyers may not be so compelling in terms of future mortgage performance.
Some industry experts and behavioral analysts might presume that potential homeowners who participate in education and counseling programs prior to buying a home will be more likely to pay their mortgages on time, but MBA’s researchers say the evidence on this point is not consistent.
Some pre-purchase programs were found to reduce the incidence of mortgage default by as much as 34 percent, but many studies found no such effects, according to MBA’s analysis. At least one study suggests such programs may result in accelerated pre-payment of mortgages, which is actually a negative for a lender’s portfolio.
About 245,000 people received pre-purchase counseling through a HUD-approved agency last year. Among them, about 17 percent were reported as purchasing a home and another 26 percent anticipated buying within three months.
“Over the past decade, concerns have been raised about the extent to which Americans as a whole are sufficiently financially literate to make the complex decisions required in the ever-changing financial marketplace,” said Collins, one of the study’s authors.
According to Collins, in theory, homebuyer education and counseling could help in three ways: 1) formalized programs can lower the costs of obtaining information about how to buy a home and obtain a mortgage; 2) objective, third-party counselors can help clients avoid emotional judgments that may not be in their long-term interest; and 3) such programs can facilitate more efficient transactions, make more information available, and reduce the level of support needed from real estate and mortgage professionals.
But again, Collins reiterated the fact that past studies on the true effectiveness of pre-purchase counseling make it hard to draw any strong conclusions.
“In summary, do we know what works? The short answer is ‘no’,” concluded Collins. He stressed though that this doesn’t mean homeownership education and counseling does not work, but drives home the point that future studies should adhere to more rigorous research designs.
MBA’s study comes on the heels of federal budget cuts that have eliminated $88 million in funding for HUD’s Housing Counseling Program.
The full report from RIHA can be found online.
Charters Must Prove Their Effectiveness
Apr 21, 2011
Authors: Stanton Lawrence is the Superintendent of the Normandy School District and a member of the Beyond Housing Board of Directors. Joyce McRath is Vice-President of the Normandy School District Board of Education.
Like many in the St. Louis area, the Normandy School District was taken quite by surprise two weeks ago to hear of House Bill 473, a bill that had been stealthily introduced and was being considered by the Missouri House of Representatives. Introduced by State Rep. Tishaura Jones of the 63rd District in St. Louis, this bill would, among other things, extend charter schools to school districts that are provisionally accredited. To that point, such campuses have been limited to the St. Louis and Kansas City school districts. Based on the outcomes experienced in those examples, is there any evidence that would lead us to believe that charter schools are the best solutions for struggling school districts?
Let us take a look at the hard facts surrounding these schools. What leaps out first are the dismal track records related to the academic performance of charter schools. Currently, charter school campuses unfortunately are not performing as well as provisionally accredited school districts. That's right — you read it correctly — charter schools are performing less well than the state's underperforming school districts. With the exception of a couple of Kansas City charter campuses that use "selective-admissions criteria" (they accept only the best and brightest students), other charter campuses have underperformed on a grand scale.
Another issue that should trigger some concern are the communities in which charter schools are being proposed. If they are indeed a universal fix for addressing the education problems of parents whose choices are severely restricted because of circumstances related to poverty, one would think that they might also provide solutions in other communities that are more privileged. Instead, charter schools are cunningly marketed as "private schools for free" to parents whose limited knowledge of their true purpose sadly misguides them into selecting the campuses as the best options for their children.
These parents regrettably never are provided insight into issues such as inferior teacher certification standards, poor academic performance, improper fiscal oversight and myriad other issues that have historically plagued charter schools. Stated differently, the parents who opt for charter schools often make an unwise choice for their children, given the dubious track record of such campuses. Often, these campuses are not required to measure up to the same stringent guidelines in place for traditional public schools.
The Normandy School District has had to come to terms with its own set of issues related to poor performance over the past few years. The manner in which we legitimately addressed such challenges was to, first of all, acknowledge their existence. Next, the district crafted a plan of strategic action that took into account all areas of deficiency along with the measures that were required to shore them up.
Nearly a year ago, our district enacted this bold and courageous plan to put the wheels in motion for a more refined school district with a transformed culture. All district staff who were not in classroom teaching positions were required to reapply for their jobs. Teachers who were identified as underperforming were informed that they would be expected to meet newly established, more elevated levels of rigor in their classrooms and, in most instances, our teachers rose to that soaring level of performance.
We looked nationwide to seek and acquire more focused and effective campus leadership for 8 of our 11 campuses. Last and most important, the Normandy Board of Education approved a strategic plan that enumerated lofty goals that are being pursued to turn around performance in a school district that admittedly has struggled for some time. And, in the midst of all of this movement, our district absorbed the Wellston School District in what we believe was a smooth and seamless transition.
We do not expect anyone to accept the claims of instructional progress as "gospel." We have the data which clearly indicate that academic traction has finally been gained, and we expect the momentum to be especially significant next year. While we are pleased with this directional shift, we also recognize that the establishment of charter schools in our district would immediately destabilize our efforts. As in most places, these campuses would siphon off many of our youngsters and would decimate our school district academically as well as fiscally.
But we will go one step further in our argument for public schools and against charters: We do not believe that they are the answer for any provisionally accredited school district. Until we see solid evidence to suggest that the failed experiment of charter schools has itself turned around, or until they are considered for all communities (instead of only poor or heavily African-American communities), we need to keep the line drawn in the sand regarding their expansion.
