PALM RIVER — Armando Celeiro came here from Cuba with $100 in his pocket. Forty-odd years later he's a furniture manufacturer and real estate investor, proud of his achievements and bullish on his community.
Hillsborough County housing officials, however, are not so hot on Palm River. It's near the top of a list of communities at risk of foreclosure and abandonment.
A new federal program would make nearly $20-million available, minus expenses, to buy and rehabilitate homes the banks have seized through foreclosure. Clair Mel, Progress Village, Orient Park and the University of South Florida area would share in this money.
Over time, the so-called neighborhood stabilization program could extend to Town 'N Country, Gibsonton and Plant City as well. The Hillsborough County Commission will consider the program Thursday.
"A lot of people wanted to get more than they could afford,'' Celeiro says of the mortgage crisis. "And I also blame the lenders.''
Still, he's not against shoring up Palm River's poorer section. "If it's done properly, of course I will welcome it,'' he said.
A troubled inner ring
A county analysis, needed to pinpoint target neighborhoods, looked at foreclosure rates, percentage of high-risk "sub-prime" mortgages, and other factors that might cause clusters of homes to be abandoned.
The resulting list represents Tampa's inner ring of suburbs, which generally share several traits: Aging housing, moderate incomes and large minority populations.
Within the city, Sulphur Springs and West Tampa show the highest need. "I think Sulphur Springs looks like the bulls-eye,'' said Sharon West, manager of the city's housing and community development office. The city's effort stands to receive $13.6-million.
Realtors, investors and community leaders in the target areas do not necessarily agree with the county designations. Some suggest that, when officials analyze the data more closely, they will find clusters of foreclosures in the newer developments, where developers and investors went overboard during the boom years.
"I have not seen what you see on television sometimes, not like what you see in Detroit,'' said Julian Garcia, executive director of the University Area Community Development Corp.
In the University area, which is mostly multifamily rental, Garcia said the foreclosures are scattered among single-family homes on the periphery.
"A lot of the foreclosure issue is about how the original mortgages were given,'' he said.
While some homeowners fell prey to predatory lenders offering too-good-to-be-true financing, others borrowed heavily against their homes. The values of those homes dropped, causing them to become "upside-down" in their mortgages, meaning they owe more than the house is worth.
"People are calling me and saying, 'My value is down.' They owe more than they have (in value). They want to refinance,'' said Bank of America mortgage loan officer Luis Silva, part of a group who met with county officials last week to discuss the program.
"We've got to stop the trend that's building, of 'Let's just pick up the phone, call the bank and get rid of $30,000 (in debt).' ''
Others warned that government could make the problem worse by buying and selling homes too cheaply.
"We've got to stop these values from falling,'' said Wesley Westmoreland of Fifth Third Bank, which has suffered relatively few foreclosures. "If everybody keeps buying at a discount, everybody's going to lose equity.''
Scott Daal, a vice president at Wachovia, agreed.
"The problem we're having is not about the properties. It's that people have no equity,'' he said. "When the values stop declining is when people will stop walking away. We're foreclosing on good customers. They're walking away because they lost equity.''
Representatives of the nonprofit organizations, who would become partners with the county in purchasing and reselling the houses, also expressed concerns in a separate meeting with the county.
They don't want the county to set people up for failure by cutting corners on the rehabilitation, or by extending the kind of creative financing that got many homeowners in trouble in the first place.
County housing officials agreed, promising conventional fixed-rate mortgages.
In some cases there will be down payment assistance. Other buyers will enjoy healthy discounts, which in effect will create instant equity.
Each homeowner also will be required to go through eight hours of housing counseling.
"I don't want to see these folks back in my program in five years,'' said Lanette Glass, community improvement manager in the county's affordable housing office.
Houses just won't sell
Tim Carroll tried for months to sell an investment house in Town 'N Country.
"We reduced the price twice,'' he said. "We had two people looking at it. Then I saw where Don Pablo's (restaurant) closed. And I knew something was afoot.''
So he rented the house instead.
Today Carroll, a 54-year-old mortgage broker from Odessa, still owns Town 'N Country rentals. His wife, who used to sell real estate, has returned to teaching. And Carroll is pursuing two fallback occupations in case real estate is slow to recover: teaching and credit repair.
For all these precautions, Carroll is not writing off Town 'N Country.
"I think it will rebound, and it's not going to get worse,'' he said. "Town 'N Country will always be Town 'N Country — a nice little neighborhood with some pockets that are disagreeable.''
Marlene Sokol can be reached at (813) 269-5307 or firstname.lastname@example.org.