By Bowling Green (KY) Mayor Elaine Walker and Deborah Williams, Executive Director of HANDS (Housing Assistance and Development Services, Inc.)
March 24, 2008

Returning from the day-long USCM Housing Foreclosure Summit in Detroit last December, Bowling Green (KY) Mayor Elaine Walker and Deborah Williams, Executive Director of Bowling Green’s non-profit housing assistance organization (HANDS, Inc.) contemplated what they had just heard. Nationwide there were 1.5 million homes now in foreclosure. An estimated $1.2 trillion in property value had already been lost. And there were no signs of a reversal any time in the near future.

Bowling Green, they knew, had been spared the brunt of the crisis, but there was no way of knowing if that good fortune would continue. By the time their plane touched down in Kentucky, they had a plan: Bowling Green would convene a meeting of key, regional stake-holders who together would map out a proactive strategy centered on outreach and education. The idea, simply put, was to identify those at risk and work to immunize them now, before their situations worsened.

Just three weeks later, an impressive group of business, community, and government officials met to form what was later to be called @RISK, a new organization dedicated to improving the financial literacy of Bowling Green homeowners. Present were homebuilders, realtors, bankers, legal aid lawyers, housing and community development professionals, as well as representatives from the offices of Representative Ron Lewis and Senator Mitch McConnell.

“We were focused most keenly on four groups,” explained Williams, “those with resetting mortgages who were behind in their payments, those with resets who were not yet behind but might become so, those with 30-year mortgages who were behind, and those who just didn’t know their situation.”

“For many people a mortgage is the most complicated, and the most financially important, contract they will ever sign,” said Walker. “We knew there were far too many homeowners who had never read that contract thoroughly or who didn’t really appreciate the implications of its terms. And we knew we had to do something to change that.”

That first @RISK meeting set out three straightforward goals: (1) identify mortgages at risk and work to prevent their foreclosure, (2) educate homeowners and potential homeowners about the complexities of mortgages, and (3) find a way to deal with vacant properties as quickly as possible.

An unexpected outcome of the meeting was an understanding that the mortgage crisis was just one reflection of a larger problem; namely a general lack of financial literacy. Bowling Green would need to become a credit'smart community.

That meant both pre-purchase and post-purchase education for homeowners, but it also called for an across-the-board educational campaign aimed at elementary, middle, and high school students, as well as the city’s adults. The city had already instituted a USCM Dollar Wi$e program, having been selected in 2005 as one of only three cities (out of 81 applicants) to receive the grant to spur financial education. Now, it was clear, those efforts would have to be dramatically increased.

Fortunately, Bowling Green already had a history of effective public-private partnership in the housing arena. Seven years ago, the city’s Department of Housing and Community Development, the Bowling Green Housing Authority, and HANDS had come together to build 27 new affordable homes in the city’s Shake Rag historical district. Even the city’s Fire Department had contributed to the project by donating and installing residential sprinkler systems, making the homes among the city’s safest and, not incidentally, solving a zoning issue that had threatened to derail the entire project. Today, Lee Square is a testament to partnership and an example of creative problem'solving.

Building on that record of accomplishment and cooperation, @RISK’s next event, dubbed “Super Saturday” will offer Bowling Green’s homeowners a unique and obligation-free way of assessing their own foreclosure risk. Bankers and legal aid lawyers will sit down and review any resident’s mortgage, explaining what might not be clear, highlighting any potential concerns, and providing advice to minimize the risk of foreclosure. Working with these professionals, residents can view their own credit reports and get credit counseling as well. “The concept is simple: don’t wait for people to get into trouble; provide that ounce of prevention now and everyone will reap the benefits down the road,” said Walker.

For more information on Bowling Green’s Best Practice, contact Deborah Williams, Executive Director of HANDS, Inc., at 877-796-4176 or d.williams@handsinc.net and Alice Burks, Bowling Green Director of Housing and Development, at 270-393-3621 or alice.burks@bgky.org.