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VOL. 123 | NO. 228 | Thursday, November 20, 2008

Lipscomb Addresses Foreclosure Crisis With Triage

By Andy Meek

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TRIAGE TALK: Robert Lipscomb, director of the city of Memphis Division of Housing & Community Development, gave an update this week to members of the Memphis City Council about a foreclosure mitigation and prevention strategy being developed with the help of leaders from the public and private sectors. -- PHOTO BY ANDY MEEK

Robert Lipscomb thinks the way to fight the foreclosure crisis in Memphis and Shelby County is to view it as part of a triage program.

The term triage refers to battlefield or mass casualty situations. Triage in those cases is the process of immediately sorting people by severity of injury, determining who needs immediate help and who may be too far beyond help. Those choices help to prioritize a medical response.

Lipscomb, the director of the city of Memphis’ Division of Housing & Community Development, told members of the Memphis City Council Tuesday that’s basically what’s being done to address the problem of foreclosures locally. A booklet passed out to council members at Tuesday’s executive session and painted a gloomy picture of the situation here, and even identified the strategy as the “Memphis Foreclosure Triage Program.”

Accompanied by Beverly Goines, deputy director of HCD, and Dondi Black, a First Tennessee Bank executive, Lipscomb brought the council up to date on a major foreclosure-related effort that’s unfolding behind the scenes. Bankers, elected leaders, civic officials and housing experts have all begun meeting to plot out a strategy to attack the foreclosure problem on several fronts.

Nipping it in the bud

Part of the effort involves some quick, crucial decisions that have to be made. The task force of public and private leaders needs to determine who needs the most immediate help and how they should focus their effort to limit the spread of foreclosures in the future.

“We’re getting $20 million-plus from (The U.S. Dept. of Housing and Urban Development) to deal with actual properties that have been foreclosed on,” Lipscomb told the council. “That’s one path we’re going down. We’re also going down an additional path – looking at how to prevent additional foreclosures.

“We’ve engaged the banks (to help). Because there’s not a whole lot we can do about the past foreclosures. They are what they are. But another important issue is how to prevent further foreclosures.”

One of the myriad fronts on which the task force is attacking the problem involves a potential class action lawsuit that would be filed against certain mortgage lending companies. Another is to develop a uniform database that collects in one place information that would be useful in identifying problem areas in the city and places most affected by foreclosure.

Almost certain

First Tennessee, a subsidiary of Memphis-based First Horizon National Corp., is the local bank that’s played the largest role in the planning and discussions so far, but Lipscomb says other local banks are being invited to participate. The next meeting of the foreclosure task force is scheduled for Friday.

The update given to council members Tuesday about the task force, its purpose and its efforts to date included some disturbing information. The packet of information council members got put the estimated cost to local government for each foreclosure at $20,000.

More than 50 percent of the loans made in half of Memphis’ ZIP codes are subprime, according to the report.

“We’ve got to get the word out there,” Black said. “A lot of people are ruled by fear when they’re faced with losing their home. They’re worried about their family. It’s very easy to resist that urge to ask for help.

“Part of what we want to do is make sure we’re all working from the same source of information and that we’re sharing that information with each other. Out of that comes something that is very actionable, getting to the root of keeping homeowners in their homes.”

The possibility of filing a city-county lawsuit against mortgage lenders suspected of offering only abusive, high-cost loans in certain areas has been discussed for about a month. Lipscomb told The Daily News the lawsuit is almost a certainty at this point, and the research is being finalized for how much the effort will cost.

“While I cannot speak as an attorney for the county, I am reasonably certain that a lawsuit along the lines of those filed in Maryland, Illinois and California would be successful,” Shelby County mayor A C Wharton Jr. told The Daily News. “The conditions that made those suits successful abound here to as much of an extent or greater than was the case in those locales.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 166 10,044
MORTGAGES 0 195 13,070
FORECLOSURE NOTICES 0 40 2,578
BUILDING PERMITS 0 370 23,894
BANKRUPTCIES 0 152 9,685
BUSINESS LICENSES 0 51 3,654
UTILITY CONNECTIONS 0 264 14,227
MARRIAGE LICENSES 0 53 3,116

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