McClure, in a meeting attended by Council members Ron Angle and Peg Ferraro, started things off with a well-researched statement detailing the home mortgage crisis and its impact on the Lehigh Valley. Nationwide, he notes that one in every 452 households are touched by foreclosures. There was a twenty-five per cent increase in October alone.
Locally, there has been a dramatic increase in foreclosures. In 2003, there were 578 foreclosures. Last year, there were 874. This year, Civil Division Clerk Holly Ruggiero and Sheriff Jeff Hawbecker told the committee that 960 actions had already been filed by the end of October. We will break 1,000 this year.
McClure told the committee that foreclosure conciliation programs are already underway in Philly, Allegheny, Blair and Lackawanna Counties. These programs are designed to divert owner-occupied properties into mediation, usually before a judgment has been entered. He noted an excellent article describing these programs in Pa. Law Weekly.
According to court administrator Jim Onembo, Northampton County's judges are considering a mediation program here. They have some concerns, and Onembo expressed them. "What about a father who gives his Son a mortgage? Or a lender from Nevada? Must they attend a conciliation conference?" Despite this problem, Attorney Chris Reed, who has been studying different programs, claims the court is "very receptive" to some form of foreclosure conciliation.
Alan Jennings, CACLV's Executive Director, told the committee this crisis extends beyond the parties directly affected. "This is everybody's problem. Every one of us who owns a home is going to see property devalued more than it already is."
Angle and Jennings, frequent sparring partners in the past, were on the same page. Angle will support some form of conciliation process so long as it does not interfere with the contractual relationship between borrower and lender. Like Jennings, Ron would prefer this mediation to occur early in the foreclosure process, before large sums of money are spent for attorney fees and to advertise sheriff sales.
Representing the Lehigh Valley Realtors Ass'n, Mark Molchany told McClure the Lehigh Valley has one of the lowest foreclosure rates in the country. "Our market is strong. Overall, nationally, we're ahead of the curve." But Jennings contradicted Molchany, noting that in 2004 and 2005, both Lehigh and Northampton Counties were among the top ten counties in the state for foreclosures on subprime mortgages.