Losing low-income students forces P-H-M to change Madison Elementary

By KIM KILBRIDE
Tribune Staff Writer
Story was first posted at 2:15 p.m. Saturday, May 22, 2010.

This fall, there no longer will be a school bus picking up 4- and 5-year-olds from Village Green Mobile Home Park and Arbors at Ironwood apartments in Mishawaka and taking them to preschool at Madison Elementary. In fact, there will no longer be a preschool.

The program that was piloted two years ago and offers the opportunity for young children in Penn-Harris-Madison's neediest schools to get a jump start on the skills they learn in kindergarten has been cut.

Ironically, the move has come because there are fewer economically disadvantaged students in the school district now than there were last fall.

As a result, federal Title I funds are being reduced by $92,000.

While it wasn't an easy decision for P-H-M administrators, it made sense to make the cuts at Madison, a school in which 26 percent of the students now receive free and reduced-priced lunches.

Back in the fall, that number exceeded 30 percent.

“This wasn't even on our radar,” said Nancy Nimtz, assistant superintendent for instruction, about losing some 4 percent to 7 percent of students who receive free or reduced-priced meals at P-H-M's six Title I elementaries.

Overall, since the beginning of this school year, the district has lost a total of 180 students. “Is that different than (this same point in) any other school year?” Nimtz asked. “I can't tell you. ... But I think it is. My gut tells me it is.”

What happened?

Jerry McKibben, P-H-M's Rock Hill, S.C.-based demographer who is originally from Mishawaka, has long predicted that the 10,000-plus student district would shrink by about 1,000 students within the next decade.

As for the loss this year of economically disadvantaged families, McKibben said it is really not a surprise.

A large subsidized housing community near Walt Disney Elementary School closed, he said. And another P-H-M elementary school draws kids from an area mobile home community, a type of housing that attracts a highly transient population, he said.

Many families, he said, are likely moving in with relatives. McKibben surmised about half of those who have left this school year likely live and attend schools in South Bend.

Nimtz said she hopes when the job market and economy stabilize, those students will return.
But McKibben isn't optimistic.

“Some will,” he said, “but the key issue is the availability of housing.” He doubts, he said, that all 180 students will return unless another large subsidized housing community opens in the district.

Barry Skalski, a Realtor with Prudential One Realty in Mishawaka and Edwardsburg, follows the local foreclosure market closely.

He approaches struggling homeowners and shares information with them about the possibility of selling their home as a short sale. That means, their bank agrees to take less for their home than it's mortgaged for.

“I've been doing short sales for three years,” he said, “and at first, people (who were being foreclosed upon) would say they were going to find a place to rent. But more and more, I've seen it become much more prevalent for people to combine households.”

Though there aren't foreclosure statistics available specifically on the P-H-M district, whose boundaries lie in Granger, Osceola and parts of Mishawaka and even Wakarusa, Skalski said “there are certainly more Granger ZIP codes popping up (in foreclosure listings).”

More impact

At Madison, full-day kindergarten will also be cut next school year.

That upsets parents like Tammy Yoder, who addressed the school board on the subject earlier this month during a regularly scheduled meeting at the Madison Township school.

Last week, she shared her frustrations further. “The preschool, I know, is one of those wonderful extra benefits,” she said, “but my main concern is full-day kindergarten. Having it taken away feels like a slap in the face.”

Several other parents also spoke in support of the programs. As to why Madison is taking the brunt of the cuts, Nimtz said of the district's six Title 1 schools, it has the lowest percentage of economically disadvantaged kids.

A KinderClub full-day program -- one in which there is a charge -- will be implemented at Madison next school year, Nimtz said.

And, she said, transfer requests to other P-H-M schools with full-day kindergarten will be honored for families with incoming kindergartners who desire a full-day program that's free.

Filling seats

In an effort to compensate for the lower enrollment that McKibben, the demographer, has predicted -- in addition to the seats vacated this school year -- P-H-M's board voted recently to open enrollment to students outside the district for the first time ever.

“We've been in the business of keeping students out,” Nimtz said. “Now, we're welcoming them in.”

As of last week, nearly 60 completed applications had already been received, Nimtz said.
McKibben predicted the district will initially attract 125 to 150 students whose families will pay tuition in the $800 to $1,000 annual range.

To be eligible for a transfer to P-H-M, students must be in good standing in their current school and have updated immunization records, among other criteria.

A lottery system will be used, Nimtz said, to admit students if interest is greater than the district is able to accommodate.

Asked about the notion that officials might pick the best and brightest candidates, Nimtz said it's simply not true.

“You may be a C-minus student in your school in good standing,” she said, “(and district officials would say) ‘bring it on.' ”

Staff writer Kim Kilbride:
kkilbride@sbtinfo.com
(574) 247-7759

Homebuyer Tax Credit Extension and Changes

Today, in a vote of 403-12, the House passed a bill that the Senate had already passed that extends the Homebuyer Tax Credit and also makes some changes to the existing tax credit. Now, before I go ANY further, I need to throw out a disclaimer that President Obama still needs to sign this into law to make it official. Although that should just be a formality, it is in fact not law until he signs it. So, this is just to inform of what the bill is and what some of the changes are.

Ready? Here we go:

The proposed new law will extend the current first time buyer tax credit from November 30, 2009 to April 30, 2010. However, it only has to be under contract by April 30, 2010. It actually has to close by July 1, 2010. This will help out with short sales tremendously!

Also, current homeowners are now eligible for a tax credit upon purchasing a home, up to $6,500. The catch here is that existing homeowners have to have lived in their home for 5 of the last 8 years in order to qualify.

The proposed new law also extends the income limits. Under the old credit, maximum income for the full credit was $150,000 for a married couple. Under the new law, the maximum would be raised to $225,000 for a married couple. The maximum purchase price on a home is $800,000.

There is also a new anti-fraud rule where the purchaser must attach documentation of the purchase to the tax return.

First time home buyers are still considered someone who has not owned a home in at least 3 years.

If you have any questions, please feel free to call me and I will do my best to answer any questions that you may have. My cell is 574-370-8156.

Facing Foreclosure? Experts Advise Action

Here is an article that I was fortunate to participate in again that was published on the front page of the South Bend Tribune today. The photo to the right was used by the tribune in the article.

Homeowners can take steps to minimize fallout.

By KIM KILBRIDE
Tribune Staff Writer

Consumer advocates have a message for homeowners mired in foreclosure: Your situation is not hopeless.

Even if your house can't be saved, they say, there are steps you can take to lessen the fallout.

"When people see the foreclosure (notice) come to the door, they just give up," said Debra Voltz-Miller, an attorney in South Bend.

This, she said, is the time for homeowners to take action.

Those who call foreclosure-prevention hot lines, such as the one in Indiana, will be referred to local counselors who will serve as go-betweens for homeowners and lenders.

If nothing else, area experts say, homeowners should become their own advocates.

Call your lender and explain your situation, they say. Ask for a modification of the terms of your loan. And follow up to ensure the paperwork is received and your request is considered.

If you've already received a notice of foreclosure from the courts, respond to it in writing, advising that you're trying to work with your lender.

And finally, the experts say, do not pay in advance for the services of a for-profit "foreclosure-rescue" company.

What's new in Indiana?

Indiana Attorney General Greg Zoeller announced recently a new collaborative foreclosure-prevention effort among multiple state agencies.

Part of the initiative is to train attorneys across the state to assist homeowners — for free — in dealing with and preventing foreclosure.

And new foreclosure-related laws have been enacted, said Judy Fox, an attorney who teaches at the Legal Aid Clinic at the University of Notre Dame.

One piece of the new legislation, she said, is a requirement that lenders give homeowners a 30-day notice before filing foreclosure.

The other new part, Fox said, is that homeowners — beginning July 1 — now have the option of taking part in a settlement conference with their lenders.

The conference offers the opportunity for the borrower and lender to settle on new loan terms, though there is no absolute requirement for the lender to make concessions, Fox said.

At the meeting, the borrower can bring a representative and though the law is ambiguous, she said, she would argue it requires the person at the conference representing the lender to have the authority to settle with the borrower.

The settlement conferences, Voltz-Miller hopes, will be able to help slow down the foreclosure problem in the state.

"If the lender and the homeowner go in (to the conference) in good faith," she said, "I think it has the potential to stop a lot of foreclosures.

"If a homeowner doesn't have a job or any monetary resources, she said, the outcome will undoubtedly be worse, though perhaps not completely unworkable.

No settlement

If a home can't be saved, Voltz-Miller said, the homeowner and lender might be able to negotiate a deed in lieu.

Essentially, the homeowner would turn over the home voluntarily, and would avoid having a foreclosure on their record. Since the ownership of the home would be transferred to the lender, the homeowner also would no longer be responsible for keeping the house up to code, she said.

But if the house is worth less than what's owed on it, a deed in lieu may not be possible.

Fox said lenders may sometimes hold the homeowner responsible after foreclosure for deficiency balances, the amount he or she owes that's above and beyond what the house can be sold for.

At the settlement conference, she said, homeowners may be able to negotiate that amount with the lender.

Also, she said, homeowners may be able to arrange a move-out date that better fits their needs.

"Saving your home is number one," Fox said, "but (if that isn't an option) it's still a good idea to go to the settlement conference.

"Voltz-Miller acknowledged the new laws won't completely solve the foreclosure issue.

"But, we've got to start somewhere. If we don't stem this problem, it'll snowball," affecting the county's tax base, and residents' quality of life, among other things. "It's this vicious circle," she said.

Another option homeowners in foreclosure might consider is trying to sell their homes via a short sale.

Barry Skalski, with Prudential One Realty, specializes in short sales.

A short sale is when the lender agrees to accept an offer on a home that's less than what the current owner owes on it.

Short sales are a way of helping homeowners avoid foreclosure, he said, though selling a home via a short sale does affect a person's credit record for two years.

Also important to note, he said, is that the shortage must be reported to the IRS as income for the homeowner. But, he said, a law was enacted that says any tax liability on that income will be forgiven through the end of this year.

Good candidates for a short sale, he said, include those who are out of work and have no prospects for employment; people who have relocated for their jobs; and homeowners who care about their credit and the neighborhoods they're leaving behind.

Homes in limbo

Fox said she's dismayed by the number of homes in the area that are sitting empty with seemingly no action being taken to formally foreclose on them and get them on the market.

There are a couple of scenarios playing out, she said.

Banks are foreclosing on properties, but are not bringing them to sheriff's sale.

In Indiana, she said, homeowners should know they're allowed to stay in their homes until the sheriff's sale has been completed.

Also, she said, "We're hearing from some banks that the housing market is too depressed. They're not filing foreclosure.

"In this situation, she said, homeowners often move out thinking the foreclosure is complete or will be completed.

Another problem is that some lenders are writing off loan balances for homeowners who have been in foreclosure.

"Consumers think they have a free house," she said, "but they don't."

The debt could be sold to a third party who could seek payment from the homeowner later. Plus, she said, there still would be a lien on the property, which means the homeowner could not sell it.

Homeowners in this situation, she said, should try to keep making payments.

Two local banks and one branch office of a national bank were contacted for this story. Two of them would not go on the record and the third did not return a phone call.

Fox, meanwhile, is not alone in noticing the number of homes in the area that seem to be in limbo.

Among other responsibilities, Jessie Whittaker, director of the LEND Homeownership Center with the South Bend Heritage Foundation, is currently trying to identify five homes in specific areas of the city that have been abandoned or foreclosed on for potential rehabilitation.

Driving around those areas on the west side of South Bend, she said, it's been difficult to find five homes that are suitable, not because there aren't enough abandoned homes but because there are too many.

"We've got to know that when we rehab it, someone is going to buy it," she said.

And one rehabbed home sitting among five or six that are boarded up is not going to look very appealing to a buyer.

So, she's considering recommending the organization buy, with special grant money that's available, all five homes on the same block.

"Maybe that'll have an impact," she said.

Staff writer Kim Kilbride:
kkilbride@sbtinfo.com
(574) 247-7759

Job Losses Dim Home Sales In Many Cities

Here is a quick little article I found on CNNMoney I thought you might find interesting (Make sure to look at #5 on this list):

Unemployment is the biggest reason why foreclosures continue to climb and the housing market isn't recovering more quickly, analysts say.

In 13 cities, most of them in California, the unemployment rate rose above 15 percent in April. Joblessness was above 10 percent in 93 cities, according to statistics from the U.S. Bureau of Labor Statistics.

The 13 cities where unemployment is the worst are:
1. El Centro, Calif., 26.9 percent
2. Yuma, Ariz., 20.3 percent
3. Merced, Calif., 18.3 percent
4. Yuba City, Calif., 18.2 percent
5. Elkhart, Ind., 17.8 percent
6. Modesto, Calif., 16.8 percent
7. Stockton, Calif., 15.6 percent
8. Bend, Ore., 15.6 percent
9. Fresno, Calif., 15.5 percent
10. Visalia, Calif., 5.4 percent
11. Redding, Calif., 15.4 percent
12. Hanford, Calif., 15.3 percent
13. Longview, Wash., 15.2 percent

Source: CNNMoney, Julianne Pepitone (06/03/2009)

GCC Weekend Update

This was a skit that my church, Granger Community Church, did a couple months back on the economy. I thought it was pretty funny stuff.

Top Economists Say Recovery Has Begun

Economic recovery is about making people feel more confident, says Mark Zandi, chief economist of Moody’s Economy.com.

Zandi evidenced increasing home sales and gains in the stock market are some promising signs that the worst is over and people will start spending again.

“We’re starting to see some pent-up demand for goods,” he says.

But Zandi warns that the situation is still fragile. "Confidence is a very fickle thing. It can go from abject pessimism that pervades now to a more balanced view of the world rather quickly.”

Robert Brusca of FAO Economics is predicting strong growth in the last half of the year and a quick recovery for the labor market. "You've lost 5 million jobs. It shouldn't be hard to put 2.5 million jobs back on rather quickly after you hit bottom," he said.

Joseph Carson, chief economist at AllianceBernstein, calls improving home sales, a rising stock market, and better-than-expected retail sales in February and March good signs of a turnaround. By the time President Obama’s stimulus package takes effect, the economy will be ready, he says.

"The stimulus has a much better chance of working if trends are already turning up than if it needs to halt a decline," he said.

Source: CNNMoney, Chris Isidore (04/06/2009)

My Economic and Real Estate Recovery Plan

I have been a little hesitant to post this, but it has been on my mind for the last week or two, which is probably why I have not posted as much lately. I've been trying to think of the right way to present this, as I keep getting urged from people around me that I should speak up about how we might be able to get out of this economic/housing situation.

So first, I want to say, that this is not meant to replace any current programs out there that have been floated by our government. I think that there are some very good programs that have been started with the stimulus bill that was passed. I also think that there were a few things in that stimulus that should not have been a part of it.

Second, I do think that the new plan to help stop foreclosures could work, as long as the banks buy into it.

So, kind of the same thing with this, people would have to buy into it. The agents and business people I talk with (Democrat and Republican) seem to like what I am about to propose that our government look at doing. Now that the disclosures are out of the way, here it goes.

To fix the economy, job creation and real estate recovery must go hand in hand. My plan to create jobs, would be through energy independence. I would accomplish this by giving every new start up "green" business 100% exemption from taxes of any kind for the next 2 years. It seems a little radical, but, it would enable small business to avoid a huge barrier and empower them to hire employees and invest capital in research and development. For existing companies that chose to invest in "green" technology, they would get a partial tax break depending on the amount of their business is dedicated towards it. I think this would lay the foundation for a large employment and education "boom" in this country as people would need to be retrained as the old style blue collar jobs have gone away and probably are not coming back. This would create a new kind of blue collar job. Also, this would strengthen our national security by lessening our dependence on foreign energy.

The real estate side of things, I feel, can be fixed by smart lending. A few years ago, the mistake was made by letting people with bad credit history buy a house with zero down with a low interest rate. Since then, lending has went the opposite direction as a knee jerk reaction. We need to get back to sensible lending practices again. Zero down programs are not the problem. Giving zero down to people with bad credit is a problem. People with a credit score of 720 or higher and good debt to income ratio's should be able to buy a house with zero down and get a good rate. They have proven over time that they pay their bills on time and are responsible with their credit. People with 719 down to 660, should be able to by a home with 2% down and an interest rate slightly higher-say 1/2 point higher. People with 659 down to 600 should be able to buy with 5% down and a point or so higher for an interest rate. This will allow the people that should be buying to buy, and make it more difficult for others to buy, which is how it should be. I have known people that earn close to 7 figures a year that have 600 credit because they don't pay anything on time. It is not fair that they get the same or better rate than a person does making $80,000 per year that has a 790 credit score.

To fix foreclosures, in addition to what the government has already started, I would do a temporary moratorium on foreclosures for 6 months for the unemployed. After 6 months, they would have to make 1/2 mortgage payments for 3 months. At 9 months, they would have to make 3/4 of a mortgage payment monthly. After 1 year they would be back to having to make a full mortgage payment. All missed payments and monthly shortages would be put onto the back of the loan. This would give people enough time to find another job or get the necessary job training to get another job. It would slow up the glut of houses hitting the market and keep people in homes.

These are some radical ideas, but they could work, I think. Let me know what you think.

WWJD

As what is a habit for me, I woke up this morning turned on my "Morning Joe" on MSNBC to see what is happening that I may have missed. The big topic of the day? How the banks that have received bailout money have $1.5 billion in corporate bonuses and vacations etc. with part of that $700 billion we gave them. Several questions popped in my head at that time. What would Jesus have done in this whole "bail out" situation? Would he have bailed out the banks or let them flounder? How would he have looked at how we have used our talents that were given to us as a nation? We are a nation founded on Christian principles, does he feel that we are following those principles or using it only in certain situations that make it easy to look in the mirror instead of on the tough decisions that make it hard to look in the mirror? Would Jesus be proud of us or disappointed in us as a nation?

I know those are deep questions, but that is what I've been thinking about today.