Help for those facing foreclosure
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By Josh O'Gorman Herald Staff - Published: December 16, 2008
SPRINGFIELD — In another sign that home foreclosures are on the rise, two organizations devoted to homeownership are shifting their resources to foreclosure prevention.
The Rockingham Area Community Land Trust received a $27,900 grant to expand its foreclosure prevention counseling program and the NeighborWorks of Western Vermont received a grant for the same cause for $24,120. The grants come from the National Foreclosure Mitigation Counseling Program, funded through the Housing and Recovery Economic Act of 2008 and apparently the money could not have come at a better time.
"We're seeing more and more traffic every day," said Bruce Whitney, director of the NeighborWorks HomeOwnership Center of Southeastern Vermont, a division of the RACLT. "Our caseload is certainly increasing."
Whitney said in response to the rise in foreclosures, his office is shifting its resources from counseling before a purchase to foreclosure prevention. In the past, Whitney's office would counsel prospective homebuyers to ensure they knew what they were getting into, and it appears that counseling was effective. While exact numbers are not available, Whitney said homeowners who completed prepurchase counseling with the Vermont Housing Finance Agency have lower rates of foreclosure than those who did not.
Whitney said when a homeowner comes looking for foreclosure prevention counseling, his office will perform a financial assessment to learn why the mortgage is delinquent — loss of job, divorce and medical bills are the most common issues, Whitney said — and determine if the mortgage was sustainable to begin with.
The organization serves residents of Windham and Windsor counties, and foreclosure rates in these counties are on the rise compared to last year. According to the Banking Division of the Department of Banking, Insurance, Securities & Health Care Administration, in the first 11 months of this year, foreclosures in Windsor County increased by 12 percent compared to the first 11 months of 2007, from 142 to 157. In Windham County, the situation appears far more dire. Foreclosures are up 92 percent for the first 11 months of the year compared to 2008, from 75 to 144.
"There's really a need to have local counseling for people facing foreclosure," said Thomas J. Candon, the deputy commissioner of the Banking Division.
In April, Candon's division established the Mortgage Assistance Program, which works with local homeownership centers like Whitney's. Candon said his office has received 290 calls since April from homeowners facing foreclosure, but the reasons they are facing this crisis do not mirror those of the mortgage crisis nationwide.
Many homeowners nationwide facing foreclosure have subprime mortgages, some with variable interest rates. Candon said only 7 percent of homeowners who called his office had subprime mortgages, and only 3 percent had subprime mortgages with variable interest rates. Instead, most cited loss of job, divorce or medical bills, Candon said.
Candon and Whitney offered similar advice to homeowners facing foreclosure.
"It's better to face up to the situation early," Candon said. "If they have problems, they should contact their lenders and start counseling early."
"The most important message is to call us or their lender early. The earlier they start, the more options they have," Whitney said. "People should not be afraid to call their lenders. It's always been true, but now even more so — the lender does not want the house."
Homeowners can call the RACLT at 885-3220 or the Banking Division's Mortgage Assistance Program at (888) 568-4547.
Contact Josh O'Gorman at josh.ogorman@rutlandherald.com.
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