Regina Moore has lived in her Hamilton, Ohio, home, in the heart of House Speaker John Boehner's district, for 50 years.
Her husband passed away in 2005, and in 2008 she took out a new $72,000 mortgage so she could afford to pay her medical bills. She had a steady job, having worked at the Champion Printing Company in Cincinnati for more than two decades. Her monthly payments on her $86,000 home amounted to about $450.
It was a simple mortgage for a simple home -- no exploding payments or swimming pools.
But last year, at the age of 70, Regina lost her job, and her $1100 a month Social Security payment wasn't enough to make ends meet. She called her son, Jeff, who works three part-time jobs, to ask for help.
"She had a mortgage on her home and just couldn't afford to pay the bills anymore," Jeff said. "She went through a period where she was embarrassed. She didn't want to say that she couldn't get a job or couldn't pay her mortgage. And finally it got to a point where she was facing foreclosure and called me."
While Jeff, a local housing group and a lender ultimately helped Regina modify her mortgage so she could stay in her home, many of her fellow Ohioans haven't been so fortunate.
Hamilton, about 45 minutes outside of Cincinnati, has one of the highest foreclosure rates in Butler County. And Butler County has been a foreclosure hotspot for years. Along with the Cleveland and Columbus areas, Cincinnati and its surroundings have seen the predatory subprime binge come and go and now watch as the crumbling job market pushes more and more homeowners into financial ruin.
In February, Butler County featured the highest foreclosure rate of any county in Ohio, according to RealtyTrac data. In March, it had the second-highest rate.
"In the beginning, we really saw more loans that we thought had predatory features," said Sister Barbara Busch, a Catholic social justice worker who serves as Executive Director of a Cincinnati-based homeowner advocacy group called Working In Neighborhoods that does extensive work in Butler County. "When we first started doing this, I would say 70 percent of the people who came through for counseling were in the subprime market. But in 2008 and 2009, it started slanting toward option-ARMs, and then in 2010 we saw a large number of unemployed, where the loans themselves weren't so bad, but people had just lost their jobs."
Others who work with struggling homeowners say the same thing: The initial wave of mortgage problems was due to people unable to manage exotic or high-risk mortgages, but the current problem simply involves people losing jobs in a weak economy who can't pay their bills.
"In certain communities in Butler County there was a fair amount of predatory lending," said Stephanie Moes, an attorney with the Legal Aid Society of Southwest Ohio. "But most recently, it's homeowners who are still struggling with the economic downturn. These are homeowners who have done everything right in the sense that they were careful about the kind of mortgage they got, they didn't buy a property they couldn't afford, but now they're facing long-term unemployment."
THE SPEAKER IS SILENT
Over the past three years, lawmakers across Ohio have pressed for foreclosure relief, often crossing party lines to do so. But Boehner has never joined the effort. When Rep. Steve Chabot, a fellow Republican whose district borders Boehner's and shares many of its economic hardships, backed a 2008 bill to grant relief to homeowners in bankruptcy courts, Boehner refused to sign on. When Democrats passed a separate foreclosure prevention bill later that year, Boehner blasted it as "a bailout for scam artists and speculators."
When banks briefly halted foreclosures amid the robo-signing scandal last November, President Barack Obama vetoed a bill that would have made it easier for banks to push through improper foreclosures and harder for homeowners to show they had been wronged. Boehner, along with 168 Republicans and 16 Democrats, embarked on a failed effort to override that veto, even at a time when Ohio's own Attorney General had begun suing banks for fraud.
Boehner is rarely pressed on housing issues publicly, even though the foreclosure crisis marches on unabated. While his office declined multiple invitations to comment for this story, the House Speaker made the case for his opposition to foreclosure aid in a recent appearance on CBS News' Face The Nation.
"Over the last couple years, Congress has really set up four programs to help with those mortgage problems," Boehner told CBS' Harry Smith. "And unfortunately, none of those have worked. And all they've really done is dragged out the length of time for the market to clear the problems."
The argument holds for programs like President Barack Obama's Home Affordable Modification Program (HAMP), which anti-foreclosure activists have long criticized for being overly reliant on big, reluctant banks to implement it.
Still, in many housing markets -- especially in Ohio, and especially within Boehner's own district -- there is simply nothing left for "the market to clear."
Regina Moore's $86,000 home isn't an anomaly in the region, even though it's worth much less than the median U.S. home price of $169,900, according to Zillow data. Ohio never experienced the rabid run-up in home prices that states like Florida and California went through, but its foreclosures drive down home prices further than any other state.
The average Ohio foreclosure in 2010 sold for 43 percent less than an ordinary home sale, a discount more than 50 percent below the national average, according to RealtyTrac data. Today, the average foreclosure sale price statewide is $77,795.
"If people are trapped in houses where they can't pay their mortgage but can pay something, you can prevent areas from becoming desolated by foreclosed and abandoned homes, which drive down prices for everyone," said economist Dean Baker, co-director of the Center for Economic and Policy Research, a left-leaning research group.
Boehner's job as House Speaker includes partisan duties beyond Ohio's eighth district, a southwestern swath of the state that encompasses six counties from the Cincinnati suburbs to sparsely populated farmland. Boehner is also tasked with leading the GOP's Congressional agenda and spearheading a host of corporate fundraising efforts critical to the party's campaign operations. As foreclosures have steadily ravaged the eighth district, Boehner has raked in millions of dollars in campaign cash from the financial sector.
And Boehner consistently votes with Wall Street on major policy issues. He voted in favor of the bank bailout in 2008, and opposed financial reform legislation in 2009 and 2010, even as he socialized with such major financiers as JPMorgan Chase CEO Jamie Dimon in an effort to raise campaign cash.
Over the course of his career, Boehner has raised $4,261,340 from the finance, insurance and real estate industries, according to data from the Center for Responsive Politics. In the first quarter of 2011 alone, after Boehner became Speaker of the House, his fundraising operations secured $638,742 from the same sector for his campaign, his political action committee and then the Republican Party, according to data compiled by Paul Blumenthal of the Sunlight Foundation.
When Jeff Moore learned about his mother's mortgage problems, he contacted a foreclosure counseling group called Empowering and Strengthening Ohio's People, which helped him apply for relief from a new program called Restoring Stability.
The program uses the state's Housing Finance Agency to provide up to $15,000 to help struggling borrowers catch up. Restoring Stability is one of seventeen foreclosure relief programs working with money from the Hardest Hit Fund. Drawing from a small portion of the federal funds allocated for the 2008 bank bailout, HHF lets state governments devote funding to helping homeowners avoid foreclosures.
And unlike other TARP programs, including Obama's HAMP initiative, the Ohio government actually requires banks to sign a legally binding contract with the state, creating clearly defined obligations: the bank gets money, but the mortgage must be modified.
It took seven months, but the program worked for Regina Moore. Central Mortgage, Moore's lender, cancelled her foreclosure and agreed to a plan that will keep her from losing her home.
Housing counselors in Ohio say that Restoring Stability is, in many ways, an improvement over HAMP. While it still relies on banks to follow through with modifications, the state's Housing Finance Agency processes paperwork to determine whether a borrower qualifies for the program or not. That prevents banks from losing key documents, botching the analysis or using the modification process to abuse borrowers with predatory fees (all common complaints from borrowers working with HAMP).
But the program has serious flaws. Jeff said he couldn't understand why it took seven months for his mother's paperwork to be approved. It wasn't terribly complicated, he said; either the numbers worked, or they didn't.
The program's managers acknowledge the slow start. While they began accepting applications for aid in September, they were unable to actually help anybody until they had worked out legal agreements with different banks.
"We were overly optimistic about how fast we could get this up and running," said Cindy Flaherty, director of homeownership for the Ohio Housing Finance Agency.
Restoring Stability managers have spent much of this year automating software to allow applications to be processed faster. Things do seem to be picking up speed: After approving aid to 400 borrowers in the first three months of the year, another 400 received help in April. The program currently has 1,000 more approvals in the pipeline.
Even the Moores' seven-month process compares very favorably to HAMP. According to a new report from the Government Accountability Office, it takes about half of HAMP borrowers more than seven months just to hear if they've been approved for a trial modification, which doesn't include the time it also takes for the actual trial modification offer to be put through or for borrowers to secure permanent mortgage relief.
But the biggest problem with Restoring Stability isn't its sluggish start. It's the basic design of the relief borrowers receive. Regina Moore will get about $12,000 to make up for missed payments, and the Ohio Housing Finance Agency will cover all of her mortgage payments for six months. When that six month period is up, Regina will have to work out a permanent modification plan with her bank.
So far, the Moores say their bank, Central Mortgage, a division of Arvest Bank, has worked with them and has been cooperative with the modification efforts. Central Mortgage said the Restoring Stability program was "a helpful tool" for keeping borrowers in their homes.
"I really don't have anything bad to say about Central Mortgage," Jeff Moore said. "They just wanted to get their loan paid. She really wasn't being taken advantage of, she just couldn't afford to pay her bills."
Ohio, like 26 other states, requires banks to obtain a court order to foreclose. It's a protection for borrowers that helps prevent banks from evicting the wrong families. If you want to challenge a foreclosure, you can. But you need a lawyer, and families on the brink of losing their homes often can't afford attorney fees.
"In Ohio, a homeowner is a party to a court case in a foreclosure, and naturally, it's difficult for anyone to proceed in a court case without a lawyer," said Aneel Chablani, director of advocacy with Advocates for Basic Legal Equality, a legal aid group based in Toledo, northeast of Boehner's district. Chablani says that ABLE's five in-house attorneys can handle about 20 foreclosures at a time free of charge to homeowners, nowhere near enough to tackle the thousands of cases they are asked to represent each year.
Last year, the Treasury Department's lawyers determined that the 2008 bank bailout legislation forbade the use of federal bailout funds to cover distressed borrowers' legal costs even though banks and hedge funds have been allowed to use bailout money for their own legal costs.
For homeowners, a lawyer can be the difference between keeping their home and losing it. Even Jeff Moore had to hire an attorney to clear his foreclosure with the helpful Central Mortgage, and he'll almost certainly need legal help when it comes time to negotiating a permanent deal with the bank for his mother.
Big banks, by contrast, are frequently combative throughout the entire foreclosure process.
The Legal Aid Society of Southwest Ohio (LASSWO) is currently suing Bank of America on behalf of 12 families, including at least one in Boehner's district, for filching on loan modification agreements that it made during an October 2009 in-person "borrower outreach" program in Cincinnati. The Treasury Department sponsored the event as part of its HAMP program.
After detailing a modification for the borrowers, Bank of America employees promised the families that they'd receive final paperwork in a few weeks, according to lawyers for LASSWO.
When the homeowners didn't hear back, LASSWO checked in with Bank of America. The lender denied attending the event, according to LASSWO, which filed a lawsuit against the bank last summer on behalf of the families. The suit hasn't been resolved, and Bank of America declined to comment for this story. The company's political action committee and its employees have donated $42,825 to Boehner's political projects since the lawsuit was filed, according to the Sunlight Foundation.
"It's next to impossible to have a constructive discussion with a bank or a loan servicer, especially if you don't have a lawyer available," said Mary Asbury, executive director of the Legal Aid Society of Greater Cincinnati.
In December, in what may well prove to be the final major foreclosure relief vote on Capitol Hill, Congress voted on allowing states to use Hardest-Hit Funds on legal aid. Ohio and the other states weren't requesting more money, they were asking for some of the funds they had already been granted to be approved for legal aid, effectively overturning the Treasury's opinion on the matter from last year. At the final hour, Treasury Secretary Tim Geithner even lent his support to the bill.
Legal aid funding is a key lynchpin for ensuring that borrowers get long-term relief, but it amounts to peanuts in comparison with the $700 billion TARP legislation. Ohio only wanted $5 million of its $570 million funding to go toward legal fees. Nevertheless, the vote failed.
"It was a huge disappointment," said Asbury.
And the vote failed even though six Republicans crossed the aisle to support the plan; two from Florida, one from Alaska and three from Ohio. Ohio Republican Rep. Steve LaTourette, who declined to comment for this story, even worked the floor as he tried to win over more Republican supporters.
According to Democratic aides, Boehner was a top target for support. Knowing that his district and his state were facing serious foreclosure trouble, they actively courted the GOP leader, hoping that on this issue, at least, they might be able to win him over. If the top House Republican backed the bill, others might join, so the thinking went.
But Boehner rebuffed efforts to divert some of that federal funding to help borrowers in foreclosure litigation. As the vote approached, Boehner's spokesman, Michael Steel, launched a broadside against the entire effort.
"This bill re-opens the TARP bailout fund for 'legal aid' programs, which could result in millions of taxpayer dollars being pumped into groups similar to ACORN," he told HuffPost.
The Hardest Hit Fund is, nevertheless, moving forward. So far it has spent only about one percent of its total funding authorization of its $570 million budget. With its current funding, the program could deliver help for up to 60,000 homeowners in Ohio, provided that banks continue to cooperate. But much of that relief may ultimately be short-lived without legal assistance for borrowers.
And Ohio needs all the help it can get.
"The foreclosure problem is just symptomatic of what's going on with the economy," said Jeff Moore. "I watch the news channels, I read a ton on the internet and I hear that things are rebounding and the economy's getting better. But it's not good. The economy is not in good shape."