Housing Crisis

Oct. 27, 2008

Transcript:

Ted Simons
>> Good evening and welcome to Horizon. I'm Ted Simons. In these tough economic times, many Arizonans are struggling to hold onto their homes while others are finding it difficult to buy a house. Both the state and federal governments are providing relief to those caught up in the housing crisis. Here to tell us what they're doing is Fred Karnas, director of the Arizona Department of Housing. Good to have you on the show. Thanks for joining us.

Fred Karnas
>> Good to be here, Ted.

Ted Simons
>> Let's talk first about the housing Arizona initiative. What is that?

Fred Karnas
>> It's an initiative led by the governor to address the economic problems faced by two elements of the community, one being those facing foreclosure and those who are facing homelessness.

Ted Simons
>> Give us an example. Start with the foreclosure aspect. If someone is looking at foreclosure, how does the initiative help them?

Fed Karnas
>> Well, the initiative helps them a number of ways. Using state housing trust fund dollars, we use that to connect with some of the federal dollars that have come to the state. But the most important thing is encouraging folks first of all to contact their lenders. If they're in trouble, call their lender, call 1-877-448-1211 and get the hot line but get some help right away early on. Or go to the governor's website. And there's a place on the website that talks about feeling the economic crunch. You can get all kinds of information both about foreclosures and other things you might be facing.

Ted Simons
>> It's at once informational but also there are tangible things that can be helped, correct?

Feed Karnas
>> Absolutely. One of the things we've put into place over the last few months, there are a number of housing counseling agencies across the state. The housing initiative dollars plus federal dollars have helped them to sort of change their business from being working with first time homeowners to working with folks who are facing foreclosure. So if you're having trouble getting to your lender or convincing your lender they ought to pay attention to your situation, call that number and that counselor will help you sort of work throughout process.

Ted Simons
>> Are investors and landlords included in this? Do they get assistance?

Fred Karnas
>>This is focused on homeowners who are living in their homes. There are a lot of folks who are struggling out there. But the reality is the investors are sort of taking a risk. We've got to give first priority to people trying to stay in own homes.

Ted Simons
>> As well as trying to get folks into the housing market, there's assistance for families for down payments.

Fred Karnas
>> Arizona has had a down payment program in the rural parts of the state for years. And the cities, and counties have their own down payment assistance programs and targeted to help folks get into their first home.

Ted Simons
>> How do you make sure, though, that these folks once they get into that first home can stay in that first home considering that was one of the reasons among many that we're in the cycle we're in right now?

Fred Karnas
>> One of the things that's really different about the down payment assistance programs that are offer not only here but elsewhere in the country is a real focus on education. Many of these folks have to go through eight hours of homeowner training, understanding that it's not just the down payment, it's not just the house payment, but what it costs to be a homeowner. And we found that of people who is gone through that training are much less likely to lose their homes or be taken advantage of in a loan process. And it really is important. We encourage everybody to spend that time to go through that course and learn about what being a homeowner really is.

Ted Simons
>> And for those who have lost their homes and may be looking at living on the streets for awhile, that's quite a change for them. What kind of assistance is out there at least as far as the initiative is concerned?

Fred Karnas
>> The Housing Arizona Initiative when it focus on the homeless side of things is really looking at an array of issues. Right now we're seeing an incredible increase in the number of homeless people on the streets in downtown Phoenix and other parts of the state. One of the things we really are trying to accomplish is targeting in three or four of the subpopulations of homeless folks who really need our help even more than everybody else. That is young people who are on the streets, people who are suffering from serious mental illness's who are coming out of the prison system and we know for sure if you go from the prison system to the street it's almost a sure ticket back into prison. So those are critical populations. And veterans. We're seeing more and more homeless women veterans and we're looking at ways to try to reach out to them.

Ted Simons
>> Recently passed federal housing bill, how much money does Arizona get out of that?

Fred Karnas
>> In the recently passed bill we received $38 million at the state department, $121 million across the state for neighborhood stabilization. That's really targeted -- the winners are folks living in neighborhoods and paying their mortgages but find themselves with vacant houses around them. Their housing values are plummeting. There's crime and blight in the neighborhoods. These values are intended to focus on those targeted neighborhoods and get new home buyers into those neighborhoods and fill those houses up and hopefully stabilize the troubles that they've been having.

Ted Simons
>> So that's the attraction, that's the intent I should say is get those homes that are sitting there with the signs in the ground forever, get someone in there as soon as you can.

Fred Karnas
>> Absolutely. Trying to really get folks into housing as prices have come down and help these neighborhoods out that have been so hard hit.

Ted Simons
>> These things both state and federal are, these going to be more than band-aids?

Fred Karnas
>> Well, I think they one more tool, you know. I think both the counseling program, the stabilization program, this is a big issue in Arizona. It's going to continue to be a big issue in Arizona. These dollars are not going to solve the problem but they're one more tool we can use to try to help out as much as we can.

Ted Simons
>> Have you ever seen anything remotely like this housing/credit crisis we're going through right now?

Fred KARNAS
>> Absolutely not. I've been working on housing for 25 years and this is as bad as I've ever seen. It I think for homeowners, for folks that were on the edge and have fallen to the streets it's just really a hard time for an awful lot of folks. The ripple effect as we all know across the business community and elsewhere is having an impact also.

Ted Simons
>> Okay. So for more information, the governor's website, is it kind of a one shop stopping?

Fred Karnas
>> The best is to go to www.arizonagovernor.gov or call the hot line. And either of those you can find your way for foreclosure help or other kinds of help if you're being affected by the economic situation.

Ted Simons
>> Fred, very good. Thank you so much for joining us.

Fred Karnas
>> Good to be here.