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

A Full Credit Bid

I recently attended a continuing education class in Michigan and was taught some very interesting information about Foreclosure that goes against the common thought about having your house taken back by the bank. And, this applies to both Indiana and Michigan.

When your house is officially taken back by the bank is when it is sold at the Sheriff's auction. The bank does this by making a credit bid against your house. This "credit bid" is where things get interesting because of the belief out there about being sued for a deficiency judgement. The common belief, is that if you owed $100,000 and the bank takes your house back and sells it for $60,000, then the bank can sue you for a deficiency of $40,000. But that is not necessarily the true.

If the bank makes a "Full Credit Bid" on your home, then you owe nothing. A full credit bid is when you owe $100,000 and the bank makes a credit bid at, or above in most cases due to fees, the amount that is owed. This effectively negates the bank coming back on the homeowner for a deficiency judgement. Even if the house is then resold by the bank for $50,000 causing a $50,000 loss!

So, if you are in the process of having your house taken back by the bank, find out what the credit bid is on your house. This might relieve some anxiety about possible lawsuits.

Key Metric: Housing Foreclosures Fall In May

Here is an article from RealtyTrac that I thought you might find interesting:

Foreclosures declined 6 percent in May compared to April, but the number is still an increase of 18 percent compared to May 2008, reports RealtyTrac.

"May foreclosure activity was the third-highest month on record, and marked the third straight month where the total number of properties with foreclosure filings exceeded 300,000 – a first in the history of our report," says James J. Saccacio, CEO of RealtyTrac.

While defaults and foreclosure auction were down in May, bank repossessions were up 2 percent, RealtyTrac says, due in large part to increases in Michigan, Arizona, Washington, Nevada, Oregon and New York.

Nevada continued to have the highest foreclosure rate with one in every 64 housing units receiving a foreclosure filing in May, six times the national average.

These 10 states account for nearly 77 percent of total U.S. foreclosure activity: Nevada, California, Florida, Arizona, Utah, Michigan, Georgia, Colorado, Idaho, and Ohio.

Source: RealtyTrac (06/11/2009)

May Foreclosures for Elkhart County

From the best that I can figure, there were 99 properties that went to sheriff's auction for the month of May in Elkhart County.

Here is the break down per city:
Elkhart 61
Goshen 24
Nappanee 6
Bristol 3
New Paris 2
Wakarusa 1
Middlebury 1

There were 7 properties that had less than $50,000 owed on them and all 7 were in Elkhart.

There were 3 properties that had over $200,000 owed on them, 2 were in Goshen and the other was a house on Simonton Lake in Elkhart.

May Foreclosures for St. Joseph County

There were 152 total foreclosed properties in St. Joseph County for the month of May.

City Break Down:
South Bend 102
Mishawaka 30
Granger 7
Osceola 7
New Carlise 2
Walkerton 2
Wakarusa 1
North Liberty1

There were 16 properties that were owed less than $50,000 with 13 of them coming from South Bend and the other 3 coming from Mishawaka.

There were 3 properties that were owed more than $200,000 with 2 from South Bend and the other from Granger.

Fannie May Needs More Money From Treasury

Fannie Mae told the U.S. Treasury on Friday that it will need another $19 billion to offset a loss of $23.17 billion in the first quarter, as the company continues to be battered by mortgage defaults, The Wall Street Journal reports.

This demand for capital will bring the amount provided Fannie to about $34 billion; the Treasury has agreed to provide as much as $200 billion to Fannie and to Freddie Mac. Freddie, which will report its results in a few days, has already received $45 billion.

Both companies, which were taken over by the government, buy home loans from banks and turn them into securities for sale to other investors. They are suffering losses because they focus on the weakest segments of the housing market.

Alt-A loans, many of which allowed borrowers to avoid documenting their income, accounted for 39 percent of Fannie’s credit losses in the latest quarter.

Source: The Wall Street Journal, James R. Hagerty (05/09/2009)

New Indiana Foreclosure Bill

A new bill that has been unanimously passed by both chambers of the Indiana General Assembly is just waiting for Gov. Mitch Daniels to sign off on it. Once implemented, mortgage lenders trying to foreclose on a home in the state of Indiana will have to meet with delinquent home owners in order to try to modify loan terms before foreclosing on the property at sheriff's auction.

During the face to face meeting, lenders will be required to inform the property owner where they can find certified foreclosure prevention counseling and off the opportunity to engage in a settlement conference with the borrower. The lender representative does not have to have the power to authorize on the spot modified terms, but there must be someone available by telephone that does have that power. Also, the bill does NOT mandate that the lender must modify the loan.

The purpose behind the bill is to create more dialogue between the homeowner and the lender. It is estimated that there will be a need for about 700 people to perform these face to face meetings statewide. There has been no time table announced for when this would take effect once Gov. Daniels signs the bill into law.

Elkhart County Foreclosures for April

For April, Elkhart County had 169 properties scheduled for sheriff's auction today with 53 of them getting canceled, leaving 116 being taken back by the bank at last count.

Of the 116 properties, 74 were from Elkhart, 27 from Goshen, 6 from Nappanee, 5 from Bristol, 2 from Middlebury, and 1 each from New Paris and Osceola.

There were 4 properties that were owed less than $50,000 on them with 3 of the properties in Elkhart and the remaining property being from Goshen.

There were 7 properties that had more than $200,000 owed on them with 5 of those owing more than $300,000 and one owing more than $1,000,000. The one owing more than $1,000,000 is a former grocery store in Elkhart that had been closed for awhile. Of the 7 properties, 4 were from Elkhart and 3 were from Goshen.

St. Joseph County Foreclosures 4/23/09

The numbers that I am posting today are from the last 2 weeks and represent homes that were scheduled to be taken back by the bank.

There were 104 properties scheduled for Sheriff's auction, 11 were canceled, leaving 93 that appear to have gone back to the bank. Of that 93, 65 of them were from South Bend, 16 from Mishawaka, 6 from Granger, 3 from Osceola, 2 from Walkerton and 1 from Lakeville.

There was 1 home that had over $200,000 owed on it, and that home was in Granger. There were 16 homes that had less than $50,000 owed on them, 14 were from South Bend and 2 were from Mishawaka. Of that 16, 1 of them owed less than $12,000 on the home.

Federal Housing Rescue Plan Launches

The Obama Administration’s program to rescue distressed home owners got off the ground this week. The program was announced on Feb. 18, but it took several weeks to put the bureaucracy in place.

Six of the nation’s largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.

Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.

The plan calls for loan servicers to reduce interest rates so a family’s monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.

Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments—and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.

Source: CNN, Tami Luhby (04/16/2009)

2nd Largest Mall Owner Bankrupt

General Growth Properties Inc., the second-largest mall owner in the United States, declared bankruptcy Thursday. It was the largest real estate bankruptcy in U.S. history.

General Growth and 158 of its more than 200 malls will operate under Chapter 11 protection as it seeks to refinance $27 billion in debt and restructure the business. General Growth said its properties would be open for business and operating as usual.

"Our core business remains sound and is performing well with stable cash flows," General Growth Chief Executive Adam Metz said in a statement. "While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11."

The bankruptcy is seen as a warning sign of trouble ahead for other large commercial properties that are heavily leveraged.

Source: Reuters News (04/16/2009)

St. Joseph County Foreclosures 4/9/09

This week 71 properties were scheduled to be auctioned off at the sheriff's sale, 5 that I know of were canceled, leaving 66 properties for the auction. Of those 66 properties, 45 of them were from South Bend, 13 from Mishawaka, 4 from Osceola, 2 from Granger and 1 each in Walkerton and New Carlisle.

There were 2 properties that were owed more than $200,000 on them, 1 of which owed over $300,000. One was from Mishawaka and the one with the higher balance was from South Bend. Both are residential properties.

There were 9 properties that had less than $50,000 owed on them. One owed less than $20,000 which was up in Clay Twp. Of the 9 properties, 8 are from South Bend with the remaining property being from Mishawaka.

Elkhart County Foreclosures For March

There were 94 properties scheduled for Sheriff's Auction for Elkhart County in the month of March, with 46 of those properties cancelled leaving 48 that were actually taken back. Of those 48, Elkhart had 24, Goshen 13, Bristol 4, Nappanee 3, Millersburg 2, with Middlebury and NewParis with 1 each.

There were only 2 properties that had less than $50,000 owed on them. One was in Elkhart and the other was in Goshen. And, there were only 2 properties that were owed more than $200,000 on them, both were in Elkhart.

Right now, there are 169 properties scheduled for Elkhart Counties Sheriff's auction for April, and 139 scheduled for May.

St. Joseph County Foreclosures 3/26

In St. Joseph county Indiana, 49 homes were scheduled for sheriff's auction with 6 being canceled at last count for a total of 43 going to the sale. Of the remaining 43, 3 had more than $200,000 owed on them with two of those three being businesses in Walkerton and Mishawaka. The remaining property is out in New Carlisle.

There were 7 properties listed for the auction that had less than $50,000 owed, all of which were in South Bend.

In all, 31 properties are from South Bend, 7 from Mishawaka, 2 from Lakeville, and 1 from New Carlisle, Walkerton and Granger.

Elkhart County Foreclosures for Feb. 2009

Elkhart County had 108 properties scheduled for Sheriff's Auction for the month of February. At last count, 73 of those properties actually went to the sale as 35 were cancelled (3 of them I personally got cancelled). Of the 73 properties that went back to the bank, 40 were from Elkhart, 21 were from Goshen, 4 were from Bristol, 4 were from Nappannee, 3 were from Middlebury and 1 from Millersburg. There was 1 property in Elkhart that had less than $50,000 owed on it, all of the rest of the properties had more than $50,000 but less than $200,000 owed on them.

Looking ahead, right now there are 84 properties scheduled for March and a whopping 169 properties already scheduled for April.

St Joseph County Foreclosures WE 2/28

This week in St. Joseph County there were 59 properties scheduled for the Sheriff's Sale. The last count that I had, 52 actually went to the sale as 7 were cancelled. All 7 of the cancelled were from South Bend. Out of the 52 that I showed that still went to the Sheriff's Sale, 38 were from South Bend, 7 were from Mishawaka, 5 were from Osceola and 2 from Granger. Only 2 properties had more than $200,000 owed on them, one was in Granger and the other was a business located in South Bend that really did not have to get to this point but the bank would not work with the business--it's a shame when banks do not work with people. There were 6 properties that owed less than $50,000 on them, all of those were from South Bend.

Produce The Note!

Here is an interesting tactic to use to delay foreclosure on a home, and it appears to work. Ask the mortgage company to produce the note that you signed when you got your mortgage to prove that you owe them the money they say you owe. It is only a stall tactic to stay in the house awhile longer, but it is very interesting. Here is a news clip that was done by ABC News in Florida:

Obama's Foreclosure Plan

Yesterday, President Obama introduced his $75Billion, three part plan in an attempt to halt the soaring rate of foreclosures. It seeks to encourage refinancing of home that are worth less than what is currently owed on them and gives incentives to lenders to do so as well.

Called the "Homeowner Affordability and Stability Plan", it seeks to provide low-cost refinancing for as many as 5 million homeowners. If it works as planned, it would help delinquent or at-risk borrowers get their mortgages modified so that no more than 31% of their income is tied up in their mortgage. It also provides financial incentives to lenders and even a new insurance program to promote more mortgage modifications.

Banks joined 2 voluntary efforts during the Bush administration, Hope for Homeowners and the Federal Housing Administration's FHA Secure, but these efforts resulted in very few homeowners actually being helped. Hope for Homeowners helped less than 1,000 people. If banks do not comply with this new program, they may be forced into it by new legislation that would give bankruptcy judges the right to modify loan terms of mortgages, which is currently forbidden. Banks are against this legislation warning that it will bring uncertainty for lenders, who will respond by restricting already tight mortgage lending.

Under the new plan, borrowers who have stayed current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year fixed rate loan. Eligible loans would now include those where the new first mortgage (including refi costs) would not exceed 105% of the current market value of the property. Complete eligibility details will be announced on March 4th when the program starts.

This plan is not designed to lower the amount of debt owed on a home, only to make the payments more affordable by lowering interest rates for those that are in higher interest loans. It is also going to be available only to owner occupants, not 2nd or 3rd vacation homes or rental homes etc.

St. Joseph County Foreclosures 2/19/09

There are 37 homes scheduled for foreclosure in St. Joseph county Indiana for 2/19/09. Of those 37, 28 of them are in South Bend, 7 in Mishawaka, 1 in Osceola and 1 in Granger. There is one property in South Bend that is owed $890,000 which I believe is a commercial property of some sort as it is on Lincoln Way in an area where there is no high end housing. That was the only property over $200,000 this week.

There were 3 properties, all of them in South Bend, that were under $50,000 owed.

The Next Wave Of Foreclosures?

According to LPS Applied Analytics, a mortgage-data research firm, the next wave of foreclosures may be ready to hit Jumbo borrowers. A Jumbo mortgage is one that is over $417,000. Loans in excess of $650,000 are considered Super Jumbo's. Current data, as of late December, states that 6.9% of prime Jumbo loans were at least 90 days late in payment.

Nearly 25% of prime jumbo mortgages exceeded the value of the homes they backed in September. That figure would increase to at least 42% if home prices decline 15% over the next two years.

The bottom line is that the economy is discouraging sales and driving down prices even for properties that normally appeal to affluent buyers.

source: The Wall Street Journal (1/28/09)