Wednesday, June 27, 2012

Foreclosure counseling available in valley

Mortgage defaults still at 1 per day

Express Staff Writer

When the real estate and housing boom went bust in the Wood River Valley several years ago, hundreds of homeowners found themselves unable to keep up with mortgage payments. Despite the existence of federal programs aimed at keeping people in their homes, mortgage defaults continue to occur at a rate of one per day in the Wood River Valley.

"There has been no real slowdown at all since last year," said Daryl Fauth, an employee at Blaine County Title Co.

With a lagging job market, and many home mortgages costing more than the appraised value of homes, homeowners continue to face difficult choices regarding home payments.

The Blaine County Housing Authority has partnered with Boise-based nonprofit Neighborhood Housing Services to provide a free service that helps local homeowners navigate the options. Neighborhood Housing Services' foreclosure counseling is funded by grants from the federally funded National Foreclosure Mitigation Counseling Program.

Mike Payne worked at The Elephant's Perch retail store for 15 years, before being laid off in March. He said he does not know exactly why he was let go, but believes the poor economy was a factor in his employer's decision.

Since March, Payne has only been able to find part-time work, not making enough money to keep up with $550-per-month mortgage payments. He also pays an additional $437 per month in homeowner's association dues on the Elkhorn Springs condominium that he purchased in 2007. He said those dues rose from $300 in 2007.

Payne scheduled an appointment with Neighborhood Housing Services' Tom Birch, who travels each month to the Wood River Valley to provide individual consultations with clients arranged through the Housing Authority.

Birch is a former mortgage company executive, who spent 25 years in senior management before joining Neighborhood Housing Services. He said he has helped more than 1,300 families in Idaho, including 25 in the Wood River Valley, come up with a game plan regarding their home loan payment options.

Birch said the collapse of the housing bubble has left many people wondering what to do.

"When the economy stops and people lose their jobs, they haven't done anything wrong," he Birch. "They become paralyzed. People are looking for the confidence to move forward. Most people are not looking for a handout. They just want to do the right thing for their families. We help them get their information together so we can help them make the decision that is best for their family."

Payne told Birch that he tried to get his home loan refinanced last year, and applied for a home equity loan to cover his expenses. He said he was denied both by Wells Fargo Bank.

"I really could not find out why I was denied, and I also have accumulated credit card debt trying to keep up, which has created a mess all its own, trying to prevent my credit from going south."

Payne was advised by Birch to submit a home loan modification application with his bank, in part to buy time.

"This way the banks will see that I'm making an effort to keep my place, that I'm not a deadbeat wanting to walk away. I still want to invest in my community."

Birch said 82 percent of vetted applicants using his services have succeeded in getting some type of loan modification, and that the process for a loan modification has sped up since last year.

"The lenders have gotten a lot better at keeping up with the rules, which are changing all the time," Birch said. "I tell people now that they could get an answer within 90 days."

Birch's counseling is available to any Blaine County homeowner occupying his or her home as a primary residence. To be eligible for the counseling, the owner has to demonstrate a hardship like a loss of or reduction in income, unexpected increase in expenses or a change in household circumstances.

There are no income restrictions for the free service, but some federally funded loan modification programs such as the Home Affordable Modification Program, are available only for loan balances less than $727,000.

Last week Birch had four consultations in the valley, which he said resulted in two productive meetings with clients. He recommended one of those for a home loan modification application.

Birch said 18 percent of his clients either sell their homes through short sales or are foreclosed upon, two options that could still be open to Mike Payne.

"Foreclosure is not always the worst thing that can happen," Birch said. "They may be better off staying in the home rather than going elsewhere to rent. It is not unusual for the foreclosure process to take 15 months or more [after stopping home payments]."

Birch said a large part of his job is helping clients get over the shame and guilt and thinking about their situation logically.

Payne said he would like to stay in his home until his prospects for employment change.

"I'm hoping that a loan modification can happen, but it's the bank's decision in the end," he said.

Blaine County Housing Authority Executive Director Dave Petrie said the Neighborhood Housing Services counseling will continue as long as there is demand. For more information, call the Blaine County Housing Authority at 788-6102.

Tony Evans:

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