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Homeowners seek a miracle to stave off foreclosure


By MARTIN ESPINOZA
The Press Democrat

Published: Saturday, July 19, 2008 at 6:27 p.m.
Last Modified: Saturday, July 19, 2008 at 6:29 p.m.

About 200 North Coast homeowners, many of them facing the threat of foreclosure, sought help — and in some cases a miracle — on Saturday during a workshop in Santa Rosa.

“The mortgage crisis is a community problem that affects us all,” said Rep. Lynn Woolsey, D-Petaluma, who participated in a panel discussion on alternatives to foreclosure.

More than 100 people signed up for counseling services at the event, which featured bilingual workshops on budgeting and how to prepare a home for a short sale, which occurs when a home is sold for less than the amount owed on the mortgage.

One by one, people seeking help were called out of the main auditorium where the discussion was taking place, their number held up by a volunteer in a scene that resembled the break between rounds in a boxing match.

Sonoma County District Attorney Stephan Passalacqua and other panelists warned homeowners to be wary of scam artists. In other communities, homeowners facing foreclosure have fallen victim to rings that have illegally taken titles of homes, refinanced them and pocketed thousands of dollars.

Jeffrey Hoffman, directing attorney for California Rural Legal Assistance in Santa Rosa, explained recent legislative changes to the foreclosure process. The changes, which take effect Sept. 6, require lenders to give struggling homeowners a 30-day warning before filing a default notice, the first step in a foreclosure.

Some homeowners at the event said they were seeking a lower mortgage payment, which had skyrocketed beyond their ability to pay after their interest rates readjusted.

One Santa Rosa man, who did not want to be identified because he did not want everyone to know about his financial troubles, said he called his lender one month before his interest rate was set to increase.

A home he purchased in late 2005 for $422,000 was now worth $220,000, while his monthly mortgage payment rose from about $2,600 to $3,200.

“You feel a lot of frustration because your dream is out of reach,” he said, as a counselor from California Rural Legal Assistance reviewed his paperwork.

Michael Conway, senior vice president of mortgage lending for Redwood Credit Union, said homeowners can often reduce their payments with the help of a counselor by modifying their loans.

“More than 50 percent of people who go into foreclosure never talked to their lenders,” said Conway.

Saturday’s event was organized by the Federal Home Loan Bank of San Francisco, with help from Redwood Credit Union, housing advocates ACORN, California Rural Legal Assistance, and professionals in the real estate and lending business.

Although a palpable sense of gloom hung over the event, organizers did their best to encourage homeowners to seek help to keep their homes.

“It’s a bleak forecast,” said Dwight Alexander, vice president of Federal Home Loan Bank of San Francisco.

But he encouraged people not to “sit idly by and let this happen to you.”


Comments

  1. Zumabtrancas says...
    July 20, 2008 1:44:42 am

    RE: http://www.pressdemocrat.com/article/20080719/NEWS/370076370

    At one time it was illegal to make a loan to someone who the so called "professionals" knew could not repay it. When many of these loans were made, the lenders knew that after the so called "teaser" or initial rate ended the borrower could not afford the monthly payment.

    But these greedy lenders were glad to collect their loan fees and move on. And I dont recall anyone being prosecuted or even ridiculed.

    How does one become a "professional" realtor? Does it occur when you constantly tell people "this is the time to buy" or "home prices will never go down"? Again, they will say anything necessary to sell a house as they dont get paid for leveling or telling the truth. And they arent professional enough to "know the truth".!

    These representatives are worse than our Congress and regulators who created this scenario and did nothing until after the fact. Where was the Fed. Home Loan Bank when these loans were being made??????

    Unfortunately, the judges in this county either dont know banking and consumer law and the federal regualtions and laws that pertain to banks and lenders, or are in the pocket of those same lenders. As they have done nothing to ensure laws are enforced and our Constitution upheld! Ask them what the "Truth in Lending" and "Disclosure" means and they havent a clue what it is or what it does so they just dont bother with anything said in the later as required by the former!

  2. zen2600 says...
    July 20, 2008 3:37:43 am

    To top it off, you realize that Fannie Mae and Freddie Mac are "Government-Backed" but private companies? So when they profit, they pocket the money, but when they lose billions it's TAX PAYER DOLLARS that are used to bail them out. So not only did your home get foreclosed, your taxes will keep Freddie and Fannie out of harm's way.

    Corporate Welfare in action!

  3. basbra says...
    July 20, 2008 6:11:58 am

    As the old saying goes, "nothing invested, nothing to lose". Making home purchases so easy the past few years to people that could afford the initial low interest with virtually nothing down. What did anyone expect would happen when the interest rate increased? Someone with nothing invested will take a walk. This has affected almost every neighborhood in the US. It has mine. There were reasons why in the past lenders mostly required 20% down. Greed entered the picture and we all have to pay for it.

  4. johnmasterbuilder says...
    July 20, 2008 9:24:27 am

    i will tell you where one is theres a shark on farmers lane a-1 home loans led me to lose my life savings with ill eagle broker fees underfunding construction project and straight lie about everything from charging late fees when they were suppose to make payments to controlling construction funds that were suppose to be held by neutral party watch out for sherry shaw

  5. no-illegals says...
    July 20, 2008 10:54:28 am

    Why didn't these people seek professional advice before making these purchases? Don't blame the Realtors. You wouldn't blame a used car salesman for selling a car to some dummy that wanted to pay more for the car than it was worth. How many cars are repossess every year because someone bought more than they could afford? People have to take responsibility for their own mistakes! Don't blame the government for everything that happens.

  6. slchapm says...
    July 20, 2008 12:44:16 pm

    I clearly remember being told that I needed a down payment to buy a home years ago. I delayed my purchase for 5 years, withdrawing an amount from my 401K for a down payment. There were lenders showing people how they could buy a home with no money down. It also would seem to any person with a bit of understanding that 5 year term contract with possibility of higher rates could become reality. It is first the lender's fault to offer such a loan, knowing they could repossess the home upon default and the person signing that contract would hopefully know this might happen unless they did something before too late. Unfortunately, they cannot afford renegotiating and I would hope there could be something done to help those folks stay in their homes to pay the rate they had paid for the past year, giving them time to refinance or sell the home. Win win, the lender gets their money, the neighborhood isn't faced with more vacant homes, the taxpayers are not bailing out lenders and banks. They need to enforce the Truth in Lending disclosures required by law and not allow predatory lending. I had to wait to buy, but we tried manufacturing a temporary economic boom and it blew up in our collective faces.

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