One of Chicago’s largest philanthropies vowed Wednesday to commit $68 million to organizations fighting the foreclosure crisis in the city, noting that the money is the most significant private pushback against people losing their homes.
The MacArthur Foundation announced that it will spend millions of dollars to help homeowners, people in foreclosure and renters. Another focus of the charity’s effort will be returning vacant property to the housing market.
One recipient of the money welcomed the move.
“The problem is so big we need a full-pronged approach that is hitting this from all sides,” said Michelle Collins, senior vice president of mortgage lending at ShoreBank, a company with $2.4 billion in assets that is headquartered in the South Shore neighborhood.
ShoreBank is set to receive $15 million from MacArthur.
“Is $68 million enough to solve this,” Collins said. “I don’t know, but it’s a big start.”
MacArthur said its investment will spur an additional $500 million in money from other sources that will help tackle foreclosures.
The foundation hopes to assist 10,000 households. They want to counsel 6,000 borrowers and stave off 2,700 foreclosures by 2010.
The money will primarily go to eight neighborhoods in which MacArthur has been working through its New Communities Program. MacArthur spokesman Andew Solomon said the foundation had already given $150 million toward rejuvenating the 16 neighborhoods in the program.
Foundation President Jonathan Fanton said the housing crisis is threatening to erase progress in these communities and that the foundation wanted to shore up its investment there.
A community vitality index taken two years ago, Fanton said, showed improvement in half of the neighborhoods in the program.
“Today is a different story,” Fanton said. “A wave of foreclosures is threatening to wash away that progress.”
Another recipient of MacArthur’s largesse, Neighborhood Housing Services, said the grant money has bolstered its counseling and outreach services.
The organization counsels homeowners in foreclosure and assists other agencies in aspects of community development. It works throughout the city.
Mike vanZalingen, Neighborhood Housing Services’ director of home ownership services, said the organization saved almost 300 people from foreclosure last year and will use its new resources to save between 600 and 800 people this year and next.
Most of the homeowners they work with, he said, are between three to five months behind on their mortgage payments, either in foreclosure or days from it.
“Half of the people in foreclosure can be saved if they just know what to say to their lender,” said VanZalingen. He said his organization’s counselors were translation machines who could step between lenders and homeowners.
Though the city will not be receiving money directly, a yet-to-be-determined amount will go to Mercy Housing, an organization that develops affordable housing in the Chicago area. With the MacArthur money, Mercy plans to organize an umbrella organization to oversee the $55 million in federal money that the city expects to receive for purchasing and rehabilitating vacant property.
The foundation has $7 billion in assets and issues grants for $300 million annually. Solomon said about two-thirds of the $68 million will be released before the end of the year; the rest will be distributed in 2009. He added that about $6 million has already gone out.
Molly Sullivan, director of the city’s housing department, said she believed that MacArthur’s goal, while a tall order, was achievable.
“This is new, what MacArthur is doing,” Sullivan said. “But our work is not new, and we’ve worked with all of these people before.”