Below is a story originally published in the New Yorker about a woman named Addie Polk. It shows that anyone can be impacted by the mortgage crisis – even those who may seem unlikely victims. The article also brings to light the intense phychological toll that a foreclosure can take on individuals. It’s not just people’s credit reports that get hit when their home is foreclosed on, it’s their entire way of life.
So, if you or someone you know is at-risk of foreclosure there are resources available to help. If you live in the St. Louis are you can call the United Way’s 2-1-1 referral service at 1-800-427-4626 or visit their website at http://www.211missouri.com. If you do not live in St. Louis you can call 1-888-995-HOPE or visit HOPE NOW website at http://www.hopenow.com.
To read the New Yorker story click here or on the picture below.
HOPE NOW, the private sector alliance of mortgage servicers, non-profits, counselors and investors announced this week that it has developed a new program called SMP or “Streamlined Modification Plan”.SMP expands what many lenders are already doing and will begin December 15th.It is the result of working with the US Treasury, HUD, Fannie Mae, Freddie Mac and major loan servicers.
Under this plan, lenders will use an expedited process to modify or restructure loans making payments more affordable for homeowners.Faith Schwartz, executive director of HOPE NOW, says, “SMP will help stabilize the housing market”.
Eligible borrowers must be 90 days late, can be in foreclosure but not bankruptcy and must be living in single family owner occupied property
For the modification to be complete, the homeowner must make 3 payments within 90 days of the new modified payment and be current on day 90.
Escrows for taxes and insurance are mandatory.
Lenders will send letters to qualified borrowers but borrowers should not hesitate to call their lender to see if they qualify.
All the participating servicers and investors encourage borrowers to contact housing counseling agencies.They can receive free counseling by calling Beyond Housing 314-533-0600 x22 or visit www.hud.gov to find a counselor.
The Importance of Communicating With Your Mortgage Company
For years housing counselors have worked with existing and potential homeowners.Whether it is helping homeowners realize the American Dream and/or sustaining that very dream. Today the act of “sustaining” is vital as economic conditions worsen.
For homeowners who are facing difficulties with their current mortgage, I cannot stress the importance of effective and consistent communication with your mortgage lender or loan servicer.When I say communication, I mean written and verbal communication.If your loan is past due, the letters from the mortgage company often continue to pile up.Please take the time to open and read the letters from your lender!!!There are new programs that lenders such as Countrywide, Bank of America and Citigroup are extending to their borrowers.If you are eligible for one of these programs you will receive written communication via postal mail.
Another aspect of communication is verbal.I know that many borrowers facing difficulty with their mortgage are inundated with collection calls.Some of the calls may seem never ending.With several collections departments of these mortgage companies, the main objective is to collect on the debt.
For borrowers receiving such calls, I recommend requesting to speak to someone in the loss mitigation department.This department, besides looking to collect on the debt, can actually offer a long-term solution for the borrower.Again, if you need assistance, in working with your lender do not hesitate to contact a HUD Approved Housing Counseling Agency.
A word of advice: if you are working directly with loss mitigation be realistic about the type of plan offered and be forthright about household expenses.If you enter into a plan without the help of a housing counselor, make sure that the plan is achievable and affordable.
And lastly, the next form of communication is listening.Continue to remain informed about the overall mortgage industry because the situation is changing daily.Many of these changes can have a positive impact on your current mortgage.In addition, through public policy there are changes that have occurred that may help borrowers, especially borrowers with adjustable rate mortgage.To find out if you qualify for special programs, please contact your lender and open your mail.For further information contact a HUD Approved Housing Counseling Agency, too.
Eric Madkins is a HUD approved housing counselor with the Urban League of Metropolitan St. Louis. He can be contacted by e-mail at emadkins@urbanleague-stl.org and by phone at 314-615-3644.
The short answer to that question is everyone. The longer answer is that through the work on this I have discovered hundreds of different stories of people who have gone through or are in the process of foreclosure. No two stories are exactly the same. The problem is impacting people of all ages, races, and socioeconomic status.
I was just alerted by Linda Ingram – one of our partners and contributor to this blog - of a heartbreaking St. Louis Post-Dispatch article (you can view the story by clicking on the photo below). Please take a look at the story. It shows that foreclosure can impact any homeowner at any time.
As we continue to connect people to resources and raise awareness of the impact of the mortgage crisis in St. Louis the scope of the problem has become much broader and deeper. As a result, we at KETC have been discussing how to continue to connect people to resources and raise awareness and broaden our message. We are currently in planning for phase two of our project and expect launch to launch sometime soon.
If you are living in St. Louis and are having problems making your mortgage payment or are having trouble with rising debt there is help available. The United Way has a 2-1-1 referral service available that will connect you to the help that you may need. Below is some more information about 2-1-1.
The US Treasury Department has started a website called the Bad Credit Hotel. The site takes you on an interactive tour through debt management, credit history, credit scores, and what it means to have good credit. Click here or on the picture below to access the website.
In this article the Washington Post explores the FDIC’s new model to work out loan modifications for troubles homeowners on a large scale. Earlier today I spoke with one of our community partners, Chris Krehmeyer, President and CEO of Beyond Housing. I asked him to provide a little bit of context to the FDIC’s new plan. Krehmeyer says that:
“This is the first piece of programmatic work that really focuses on the homeowner who is in trouble. All of the previous legislation has focused on lenders and financial institutions. Home foreclosures are what got us into the financial crisis so it’s good to see that they the FDIC is beginning to work with homeowners directly to allow them to stay in their homes.”
He also reports that while this is a great first step that it could go further:
“The irony here is that we’re asking homeowners to sift through documents that they might not understand, which is in a lot of cases what got them in trouble in the first place. The inclusion of not for profit counselors is absolutely critical in the process if it is to really be successful.”
Despite some problems with the program the FDIC is moving in the right direction, though Krehmeyer hopes that these steps forward continue between now and when President-Elect Obama takes office.
Click on the picture below to read the entire Washington Post Article.
Below is a story from Reuters that speaks to the growing mortgages problems across the country. It’s also important to note here that while St. Louis is not the hardest hit market we are still seriously experiencing the impacts of the mortgage crisis. Click on the picture below to get to the story.
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