Valley banks, Habitat trim foreclosure-home inventory

Banks have faced criticism from homeowners and scrutiny from Congress over their handling of the foreclosure crisis.

But some Valley lenders are making a small dent in the state's foreclosure inventory by helping non-profit organizations like Habitat for Humanity Central Arizona take bank-owned homes off the market.

Habitat provides low- to moderate-income families with credit counseling and financial planning to purchase affordable homes obtained by the organization. Families put in hours of work with the help of Habitat volunteers to build or refurbish the homes, then move in and begin paying a mortgage.

Banks are helping the group in a number of ways.

Some organize employee volunteers to renovate foreclosure homes for Habitat. Others make grants that allow Habitat to purchase bank-owned homes. And some banks even deeply discount or give away their foreclosure properties.

National Bank of Arizona finished donating its first foreclosure home to Habitat this month.

The home in Glendale, shuttered this year, caught the bank's attention after neighbors raised concerns about its condition, said Pete Hill, chief credit officer.

The home's wiring was ripped out. Plumbing fixtures were smashed. Appliances were missing.

There was even a dead animal in the backyard.

"It really was a health-and-safety issue," Hill said. "The thing was in very bad shape."

The bank realized that the home, if fixed up, would be perfect for a first-time homebuyer. And the community's support for revitalizing the home was important.

"It's very rare that the neighborhood comes to us and says, 'Hey, can you help us do something with this?' " Hill said. "We just couldn't deny that."

The bank agreed to donate the home, valued at about $50,000 at the time, to Habitat and to provide volunteers to carry out repairs.

"Our friends at National Bank of Arizona got creative," said Roger Schwierjohn, chief executive of the central Arizona affiliate of Habitat. "We all hear about troubled neighborhoods with empty foreclosure homes. This was one of those homes."

For two months, bank employees worked side by side with Lorenza Ozuna, 48, and her two teenage daughters to strip the drywall, install tile floors and put up maple kitchen cabinets. A sagging roof had to be fixed, and shoddy room additions were knocked down.

The exterior and interior had been painted entirely in yellow. Now, the outside of the three-bedroom home is a pleasant white with blue trim. Inside are neutral tones with trendy brown accents, like faux beams in the dining area.

Ozuna, a warehouse-stocking employee for Cox Communications, said repairing her credit as well as the house was hard work.

"I never thought I was going to get a house," she said. But Habitat employees coached her for a year on paying off a car, credit cards and phone bills.

"I'm excited. I can't believe it," she said. "I did it."

Schwierjohn estimates banks have helped Habitat obtain 24 to 30 foreclosure homes in metro Phoenix since the recession began. Other partners include local branches of Bank of America, JPMorgan Chase and Wells Fargo.

Milton Dellossier, charitable-contributions manager for the Wells Fargo Housing Foundation, said the bank annually doles out tens of thousands of dollars to help non-profits like Habitat purchase homes. Wells Fargo employees volunteer twice a year to work on Habitat projects, usually building houses from scratch.

But this year, the bank worked for the first time on refurbishing a foreclosure home.

Dellossier said helping Habitat is just one way the bank tries to help neighborhoods.

"There's over 14,000 Wells Fargo employees in Arizona. We all live in the community," Dellossier said. "We're doing our part to solve the housing problems facing our customers and communities."

Schwierjohn said that there are already signs that the Glendale neighborhood where Ozuna and her daughters now live is reviving.

Two neighbors have freshly painted homes, and a few other houses have new roofs.

"You take a house that's an eyesore, make it look good, make it energy- and water-efficient, and we know in doing that, other people in that neighborhood will take a little more care with their homes," Schwierjohn said.

He hopes banks will provide Habitat with more opportunities to place families into patched-up foreclosure homes.

"We know there's a lot of neighborhoods out there where we can make the same impact," Schwierjohn said.

National Bank of Arizona executives agree, Hill said.

They're already looking at two locations in the Valley to repeat the Habitat partnership.

by Rebekah L. Sanders The Arizona Republic Dec. 30, 2010 12:00 AM



Valley banks, Habitat trim foreclosure-home inventory