Homeowners Seeking Mortgage Help, Hope

Housing Experts Say Homeowners Need Not Face Prospect Of Foreclosure Alone

WATERBURY - March 30, 2008 - Like a lot of people in the room Saturday, Russ is in a bind that has do with his house.

He can’t make the mortgage payments anymore. He’s lost his job and burned through his savings. He’s found a new job, but it pays a lot less than the old one — $37,000 a year instead of $55,000. Russ, who asked to keep his last name private, said he’s 57 years old, eight months in arrears and getting scary letters from his lender.

So on a sunny afternoon in early spring, he and about 60 others showed up at the Waterbury Arts Magnet School to learn whether there’s hope and where to look for help.

“Now is the time for that,” he said.

The day’s message, delivered by a panel of housing experts convened by U.S. Rep. Chris Murphy, D-5th District, was that Connecticut homeowners don’t need to face foreclosure, or the prospect of it, alone.

“Think of us as the first place to call,” said Sharon McLaughlin Gowen, homeownership program coordinator of Neighborhood Housing Services of Waterbury, a nonprofit housing advocate.

State and federal agencies, including the Connecticut Housing Finance Authority and local offices of the federal Department of Housing and Urban Development can also provide guidance, said panelists, including representatives of those agencies.

The housing crisis affects a growing number of Connecticut residents, though it is less severe here than in states where there was more housing construction in recent years, such as Florida, Arizona, Nevada and California. And the economy is on the minds of Connecticut residents, said Murphy, a member of the House Financial Services Committee’s housing subcommittee.

“When I have a town hall meeting, the most frequent topic is the economy,” not the upcoming presidential election, not the war in Iraq, he said.

Gowen’s nonprofit and others exist to work directly with lenders and government agencies on behalf of homeowners struggling with mortgage payments or already facing foreclosure. “We speak their language,” said Kyle Anderson, director of homeownership for Neighborhood Housing Services of New Britain.

The panelists Saturday said the first defense against foreclosure once homeowners fall behind in their payments is to acknowledge the situation. Some homeowners are tempted to ignore mail from lenders once they fall into arrears, panelists said, but this won’t help.

“Open the mail,” said Gregory R. Jones, a foreclosure counselor with McCue Mortgage Co. of New Britain, a major mortgage servicing company in the state. “Don’t ignore the problem. It’s not going to go away. Take it by the horns.”

Once homeowners fall behind in payments, they should reach out to their lenders and housing counselors, especially if it’s likely that more payments will be missed. The typical lender also wants to avoid foreclosure, because it’s expensive for them, both to go through the foreclosure process, as well as to maintain and dispose of properties they acquire through foreclosure, panelists said.

“There is not a lender on the planet Earth that wants to be in the real estate business,” Gowen said. “It just feels like that some days.”

Getting help from a housing counselor other than the mortgage holder will typically require homeowners to fill out affidavits in which they disclose the details of their finances. Counselors can only offer advice if they’re sufficiently familiar with the details of a homeowner’s particular situation, panelists said.

Other basic safeguards homeowners can take to avoid foreclosure include reading their mortgages in full, taking a homeownership workshop before buying a home and carefully analyzing how big a mortgage they can afford before seeking one.

Foreclosure can’t always be avoided, said the panelists, who also included representatives form the federal Department of Housing and Urban Development, the Connecticut Housing Finance Authority and Fannie Mae. But it won’t happen overnight, which means there’s usually a period of months to reach out for help even once lenders begin foreclosing.

In Connecticut, most lenders won’t begin foreclosure proceedings until a homeowner is four months behind, said Jones, the counselor with McCue Mortgage. Once they do, it typically takes another four months for the process to work its way through the legal system, he said. It’s best not to let it get that far, though.

“If you can avoid foreclosure, do it,” Gowen said.

Seeking Mortgage Help, Hope
By ERIC GERSHON | Courant