Local organization invests $5 million to stop foreclosures

The Chicago Community Trust is investing $5 million to ShoreBank to try and help curb the foreclosure crisis.

The money will go to ShoreBank's rescue loan program, which helps homeowners struggling to make their monthly mortgage payments to refinance and remain in their homes.

With so many homeowners in Chicago facing foreclosure and banks unwilling to lend due to the credit crunch, officials at the Trust felt it was time to use some of the money in their coffers to help the city find a solution.

"Foreclosures just impact the entire community," says Carol Crenshaw, vice president of CCT. "It's our way of helping stabilize the communities."

CCT chose ShoreBank because of their commitment to responsible lending practices, says Crenshaw. The money will help the bank continue their outreach to the community.

"A bank can't make a loan if it doesn't have money coming in," says Brian Berg, spokesperson for ShoreBank.

Berg says there are still many homeowners out there whose adjustable rate mortgage will explode in the next few years, meaning another wave of foreclosures for Chicago. He's urging customers to seek out a rescue loan programs before they are in trouble.

"Don't wait until the ship leaves the dock," says Berg. "Don't wait until you get behind, until you're three months delinquent."

ShoreBank has been doing educational outreach to Chicago neighborhoods which have been hit hard by the housing market crisis as part of their strategy to encourage responsible lending practices.

"We want folks to understand their mortgages," says Berg. "We've always done business and made decisions based on what is good for the community and good for the customer."

In addition to their $5 million investment in ShoreBank, the Chicago Community Trust is also making bigger plans to address the foreclosure crisis in the city.

"This is part of a larger strategy to address the foreclosure issue and the larger crisis in our economy," says Terry Mazany, president of the Trust.

Part of that strategy has been to convene experts and community leaders to study the crisis and come up with a concrete action plan to help homeowners and the economy, the Regional Homeownership Preservation Initiative.

That plan will be released in the next few weeks.

Roberto Requejo, program officer at the Trust, says the plan will help create consensus out of the chaos of the housing market.

"We are providing leadership at a time where there was no clear action," says Requejo.

Overall, the Trust hopes it can use its funds to help slow the damage the housing market has done to lower income communities.

"The rate of foreclosures is still very high," says Mazany. "What we're seeing happen is 20 years of investment in underinvested Chicago communities - those investments are in great danger because of the foreclosure crisis."

Started in 1915, the Chicago Community Trust is a regional foundation that makes grants to nonprofits to improve Chicago in the areas such as the arts, human needs, community development, education and health.

ShoreBank, founded in 1973, is a leading community development and environmental bank, and works to revitalize communities on Chicago's South and Far West sides, as well as other locations around the United States.

Staff Writer Megan Cottrell covers public housing for the Daily News. She can be reached at 773-362-5002, ext. 12.