Urban League hosts free financial literacy workshops

September 29, 2008

KETC community partner Urban League will host this series of workshops, which will cover topics such as financial literacy and foreclosure prevention. This event is free and open to the public.

10 Tips to Avoid Foreclosure

August 18, 2008

This is taken from one of the documents Linda Ingram gives her clients at Beyond Housing, produced by the U.S. Department of Housing and Urban Development (HUD).  It’s got some solid advice and references a few resources we haven’t mentioned yet.

10 Tips to Avoid Foreclosure

1. Don’t ignore the problem— The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem— Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender–The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open mail will not be an excuse in foreclosure court.

4. Know your mortgage rights— Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options— Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the Internet at www.fha.gov.

6. Contact a non-profit housing counselor— The U.S. Department of Housing and Urban Development funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance.

7. Prioritize your spending— After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.

8. Use your assets— Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan?  Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies–Many for-profit companies will contact you promising to negotiate a loan work out with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD approved housing counselor will provide for free if you contact them. You don’t need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead.

Don’t lose your house to foreclosure recovery scams!–If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a HUD approved housing counselor or trusted real estate professional.

To find out more about HUD approved counseling agencies and their services, please visit www.hud.gov or call toll free (800) 569-4287 on weekdays between 8:00 a.m. and 4:00 p.m. The same number can give you an automated referral to the three housing counseling agencies located closest to you.

 

Beyond Housing goes beyond lenders and servicers to find solutions

August 15, 2008

I took a lot away from this morning’s appointment with Linda Ingram at Beyond Housing. They too are a nonprofit in St. Louis that offers free housing counseling and a variety of other resources for homeowners.

The more I meet with people, the more I’m learning what I should be asking that I may not have known to touch on before, and it’s a real resource to go from place to place because I feel like I’m having one continuous conversation about the mortgage crisis. This was especially beneficial today.

One thing that didn’t sit well with me was hearing from a housing counselor that lenders don’t always want to work out a plan with the homeowner. Maybe it was naive on my part to believe it could be that easy to just call and work it out. In any case, I’ve tried in these profiles to stress the importance of seeking help, and it worried me to the point of losing sleep last night that maybe it’s not as effective as it seems. The good news is I was wrong.

Linda Ingram told me that, like Catholic Charities, they too have ways of working with stubborn lenders. She and her housing staff find it effective to go beyond communicating with lenders and servicers. When the lender won’t work something out, they contact the lender’s attorney.  

For borrowers with a foreclosure sale date, it can be as simple as calling the attorney and saying “I want to save my house. Can you help?” Ingram also emphasizes that, if a homeowner tries to fight the foreclosure on their own, communicate with the loss mitigation department, not collections.

Ingram also urges everyone to get involved in their homeowner education program. The three week program includes classes in financial literacy, Q&A’s with area lenders, how to perform basic home repairs, and other “must know” details about home buying and ownership. “It’s well worth the time and can keep you out of a lot of future trouble,” she says.

For those attending housing counseling sessions, they can expect to put together a “workout packet”. Pay stubs, tax returns and expenses are put together with a letter explaining why the homeowner has fallen behind and what they are doing (or plan to do) to fix it. This is submitted to the mortgage company with the intention of postponing the foreclosure sale. 

After the first counseling session, Beyond Housing sends the homeowner a summary of what they discussed and an action plan for the homeowner to follow. The goal is to work out a 5 year plan in which the client comes out with better credit and a managable lifestyle. “Any client here is a client for life,” says Ingram. “Once a person receives counseling, they can call or come by with any concern they might have.”

Ingram’s last word of caution is to be wary of scam artists trying to profit off your housing troubles. “Everyone in the world will send you letters or call about some refinancing offer or way to stop foreclosure,” she says. Some of her clients have been tricked into paying $1400+ to “work out a foreclosure solution” only to be told they needed to pay even more to find out what that solution was. The safest route someone can take is to see a nonprofit agency whose highly trained counselors offer their expertise for free.

To set up an appointment with Linda or one of Beyond Housing’s counselors, call (314) 533-0600. You can learn even more about what Beyond Housing offers by visiting their Web site: www.beyondhousing.org

Short video of Linda Ingram describing what homeowners should bring with them to a counseling session:

Catholic Charities: “Nothing is worse than doing nothing.”

August 14, 2008

Today’s visit was to the offices of Catholic Charities at 800 North Tucker to meet with Karen Wallensak, director of Catholic Charities’ Housing Resource Center. She was a panelist on our July 22nd Facing the Mortgage Crisis live show. Here’s a picture of her taken during the broadcast, and you can even see me working away on the laptop:

Karen Wallensak of Catholic Charities addresses frequently asked mortgage questions while KETC's Angela Smith answers viewer emails

I wanted to find out about Catholic Charities’ services, but after my meeting last week at Urban League I also hoped to understand more about foreclosure counseling and how negotiating with a lender works.

A little background: Catholic Charities boasts a housing resource staff of 34. Ten are nationally certified HUD housing counselors who serve as advocates, counselors and mentors for homeowners, while the other 24 specialize in areas like finding affordable places for people to live.

Their foreclosure counseling process is similar to Urban League’s in that it’s free and open to people in all stages of the mortgage crisis. And no, you don’t have to be Catholic to qualify for help (I always assumed you had to be).

Wallensak’s first bit of advice to homeowners facing foreclosure is that “nothing is worse than doing nothing.” The longer the homeowner waits to contact the lender, the more the lender assumes there’s no interest in working something out and it can become more difficult to make arrangements. Though the bank loses an average of $50,000 on each foreclosed home, that won’t stop them from taking it to satisfy the debts they owe their own investors.

So how willing are lenders to work with the borrower? “The hard truth is that lenders want to be repaid, and changing terms of a home loan’s not at the top of their list right now,” says Wallensak. But with a housing counselor, there’s a better chance of getting around these road blocks.

 If Catholic Charities can’t work out a permanent loan modification, they try to get interest rates lowered or frozen temporarily. “If a lender wants to freeze rates for six months, that doesn’t give the homeowner a lot of time to get back on their feet,” says Wallensak. “But in cases where they’ll freeze for years at a time, that’s long enough to restore credit, save money and build equity in the home.”

For Wallensak, the best way to work out a long term solution is to be realistic. If money’s not as good as it was in the past or some crisis has surfaced since buying the house, lifestyle changes must be made. Make a crisis budget. Negotiate as many other debts as possible. Communicate even if it isn’t always pleasant.

“Sometimes there’s no choice but to accept foreclosure if the situation can’t improve,” she admits. Catholic Charities offers many services for those unable to save their homes including help with moving expenses, relocation assistance and mental health counseling. Wallensak and her staff provide resources for up to a year after families relocate, and have seen many of their clients rebuild their lives with great success.

If she could tell homeowners any one thing, it would be that losing a house is devastating, but you do survive. Life does go on. “Remember not to become so emotionally invested in your house that you can’t make the best decisions for your family.”

To make an appointment with Catholic Charities’ Housing Resource Center, call (314) 241-5600 x7129 or read more about them on the Web at www.ccstl.org.

United Way 2-1-1 Helpline – Living St. Louis Video

August 5, 2008

Living St. Louis Producer Anne-Marie Berger visits the United Way’s 2-1-1 information and referral helpline. Designed to provide help to people looking for access to resources on topics such as food pantry referrals, utility bill questions, employment assistance and mortgage problems, the call center is staffed by trained operators who refer calls to the resources available closest to where the caller lives. The call center is also available by calling 1-800-427-4626.