Contact Information: For Further Information Contact: Patrick Morrissy Executive Director, HANDS, Inc. (973) 678-3110 patrick@handsinc.org Erin Angell Collins 202-220-6317 ecollins@nw.org
Forty-Seven Vacant Properties in Foreclosure in Essex County, N.J., to Be Reclaimed by a Community Coalition Led by HANDS, Inc.
First Large-Scale Purchase of Mortgages in the Country by a Local Nonprofit Breaks New Ground in Addressing the Fallout From Foreclosure
| Source: HANDS, Inc.
ORANGE, NJ--(Marketwire - April 1, 2009) - Today HANDS, Inc. announced that it acquired the
defaulted mortgages on 47 vacant homes in the greater Newark area. The bulk
purchase of 47 mortgages expected to foreclose is the first large-scale
purchase in the nation by an alliance of nonprofit organizations. All of
the homes are vacant and abandoned, and most are deteriorated, contributing
to blight in their surrounding communities. HANDS purchased the mortgages
from Washington Mutual Bank, now J.P. Morgan Chase, as part of a pioneering
new strategy to reclaim neighborhoods hard-hit by foreclosure, and is
working with its partners in Operation Neighborhood Recovery to
rehabilitate the properties so they may become cornerstones for productive
change in their surrounding communities.
Homes left vacant and abandoned in the wake of foreclosure have a
devastating effect on communities. Increased crime and vandalism, as well
as property neglect, lead to decreased property values and increased cost
-- as much as $19,000 per property -- to local and state governments,
according to industry studies. Six-hundred fifty-four New Jersey homes
were repossessed by banks in February 2009, and more than 600 New Jersey
homes were scheduled for foreclosure auction the same month.
"Time is our enemy and early intervention is the key to battling the
destabilizing influence of abandoned and foreclosed properties on
neighborhoods," said Patrick Morrissy, executive director of HANDS, a
member of the NeighborWorks network. "We knew that as time passed, the
properties would continue to deteriorate, their values would plummet, as
would the home values in the overall neighborhood. It became clear to
everyone that the results of mortgage fraud, the descending real estate
market and the loss in value from vandalism and neglect would result in
continued deterioration of our neighborhoods. Given the current economic
circumstances, this transaction made the most sense for everyone,
especially the community."
HANDS specializes in the redevelopment of troubled properties in order to
bring about long-term sustainable neighborhood change, and created
Operation for Neighborhood Recovery (ONR) as a proactive effort to deal
with the neighborhood fallout of the foreclosure crisis. While working
with other area community development corporations to stabilize and
rehabilitate the properties, HANDS will ultimately convey groups of the
properties to ONR partners that work in the properties' respective
neighborhoods. ONR partners include La Casa de Don Pedro, Unified
Vailsburg Services Organization, Episcopal Community Development, Greater
Newark Housing Partnership, Brand New Day and HOMECorp. The ONR partners
have agreed to rehabilitate the properties and make them available for
affordable homeownership -- an added benefit to the stabilizing influence
that these rehabilitated properties will have on the neighborhoods.
"At a time when real estate values have plummeted drastically, homeowners
are facing unprecedented financial stress and insecurity, and the national
foreclosure rate is at an all-time high, local nonprofit organizations in
Essex County have found a way to work together to respond to the crisis,"
said Ken Wade, CEO of NeighborWorks® America. "Nonprofit organizations
like HANDS are neighbors who care about their communities, and have a
proven track record of success. In order to reclaim our communities from
abandonment and foreclosure, nonprofits are joining together and working
alongside private sector partners to implement innovative solutions that
effectively address the scope and scale of the crisis."
This innovative transaction required a strong collaborative effort to
structure and provide the financing necessary for the purchase of the
mortgages and ongoing maintenance and stabilization costs, which are
anticipated to total $5.4 million. New Jersey Community Capital, a
community development financial institution working throughout New Jersey,
took a lead role in this transaction, coordinating the provision of debt
and equity from its socially responsible partners, Prudential Social
Investment, Local Initiatives Support Corporation-Greater Newark & Jersey
City (LISC), NeighborWorks® America, and Enterprise Community Partners.
"New Jersey Community Capital supported this project from the beginning
because of its innovative nature and the dramatic impact it can have on the
affected communities. Because of its extensive financing needs and risky
nature, the collaboration on this transaction was essential, and provided a
new opportunity for this group of socially responsible funders to work
together on such a pivotal project," said Robert Zdenek, president of New
Jersey Community Capital.
By acquiring the group of mortgages in bulk purchase, HANDS is able to
immediately invest in stabilizing the vacant properties and return them to
productive use. HANDS faces significant carrying costs (interest, property
taxes and insurance) during this process, requiring a collaborative effort
throughout all phases of the project to make it a success.
Operation Neighborhood Recovery represents the first transaction of its
kind in the nation. As the partners of ONR move into the next phase of the
project leading to the day when new homeowners move into the properties,
they are also creating the cornerstone for the development of a national
model for a community asset preservation corporation (CAPC). The CAPC model
being created by ONR will be a vital part of the solution to the
foreclosure crisis around the country.
To view pictures of the Essex County homes acquired, please visit:
http://www.flickr.com/photos/36513811@N06/?saved=1.
For more information about HANDS, Operation Neighborhood Recovery, and
their response to the foreclosure crisis in Essex County, please contact
Patrick Morrissy, executive director of HANDS, Inc., (973) 678-3110 or
patrick@handsinc.org.
**Media: For addresses of the acquired homes, please contact Patrick
Morrissy, executive director of HANDS, Inc., (973) 678-3110,
Patrick@handsinc.org.**
About HANDS, Inc.
Over the past 23 years, HANDS, Inc. has carried out and refined a
neighborhood revitalization effort in the neighboring cities of Orange and
East Orange, New Jersey bordering Newark. HANDS targets vacant and
underutilized problem properties for redevelopment maximizing the impact on
their neighborhood. We develop affordable housing, mixed-use developments
and are creating an arts district in the Valley neighborhood of Orange.
Incorporated as a nonprofit community development corporation in 1986,
Housing and Neighborhood Development Services, Inc. is tax exempt under IRS
501(c)(3). HANDS became a chartered affiliate of NeighborWorks® America
in 1999. The HANDS' strategy is built on a philosophy that neighborhoods
are revitalized by the actions of hundreds of individuals investing their
time, funds, energy and hopes in the future of that neighborhood. HANDS'
role is to leverage those investment decisions, to bolster public sector
action and generate more private sector investment. High-Impact
Development of vacant, troubled properties is the centerpiece of this
strategy. The seven inter-related core elements of the strategy are:
redevelopment of pivotal properties in target neighborhoods; increasing
homeownership/investing in first time homebuyers; strengthening
neighborhood organizations; developing leadership; increasing effective
citizen engagement; forging strategic partnerships; and shaping public
policy and private sector initiatives. Visit us on the web at
www.handsinc.org.
About New Jersey Community Capital:
New Jersey Community Capital facilitates the flow of money and knowledge to
create wealth and well being in underserved communities. In addition to its
financing activities, New Jersey Community Capital provides technical
assistance and training programs, conducts research regarding its impact
and social return on investment, and disseminates information about itself
and the industries it serves. Since its founding in 1987, New Jersey
Community Capital has committed financing for approximately 660 projects
totaling nearly $225 million in the housing, community services and
business sectors. New Jersey Community Capital has been acknowledged by
various partners throughout its history. It received the 2003 Excellence
Award for Community Impact for demonstrating its efforts have made a
difference in the communities it seeks to serve. It also received a
Corporate Partnership Award from the New Jersey Department of Education in
2007 in recognition of its efforts to support quality public school choice
for all families in the state through its leadership, creativity and
commitment to equality and excellence in education.
About NeighborWorks® America
NeighborWorks® America creates opportunities for people to improve their
lives and strengthen their communities by providing access to homeownership
and to safe and affordable rental housing. Since 1991, we have assisted
nearly 1.2 million low- to moderate-income families with their housing
needs. Much of our success is achieved through our support of the
NeighborWorks network -- more than 230 community development organizations
working in more than 4,400 urban, suburban and rural communities in all 50
states, the District of Columbia and Puerto Rico. In the last five years,
NeighborWorks organizations have generated more than $15 billion in
reinvestment in these communities. NeighborWorks America is the nation's
leading trainer of community development and affordable housing
professionals. For more information, visit www.nw.org.