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Housing Crisis: Workshop Helps Prevent Foreclosures

JANICE PODSADA

February 15, 2009

With his life back on track, Dave, a quality-control inspector at Sikorsky Aircraft Corp., wants more than anything to start making his mortgage payments again.

On Saturday, he stood outside a foreclosure prevention workshop in Hartford, holding an arm full of loan documents and, most importantly, pay stubs for himself and his wife, a medical technician.

"I'm just hoping my lender can rewrite my loan so I can start paying on it and save my home," the Seymour homeowner said.

Dave, who declined to give his last name, had the chance to make his plea to stop the foreclosure face-to-face with his lender at the free workshop, which was held from 10 a.m. to 4 p.m. Saturday at the Connecticut Convention Center.

The workshop, modeled after a similar event last year in Foxborough, Mass., was attended by 900 registered borrowers who sat down with lenders, loan representatives and foreclosure prevention counselors to discuss mortgage payment options and alternatives to foreclosure.

"These events are a benefit to homeowners because they're talking to the right people," said Robin Stout Migala, a consumer outreach manager with Freddie Mac. "Some people are afraid of talking to their lender for fear they'll speed the foreclosure along, but 99 percent of the time, when the borrower meets with the lender, the borrower walks away happy."

More than a dozen mortgage lenders and servicers, including Bank of America, Countrywide, Bank of America and Washington Mutual, attended the event. Foreclosure-prevention counselors say the deepening housing and economic crisis has made some borrowers feel isolated or hesitant or even fearful to talk to loan representatives.

Borrowers with legitimate hardships, such as a job loss or medical emergency, should be sure to talk to their lender's loss mitigation department, housing counselors say. Many times they end up with collection representatives who can take appropriate actions.

"Maybe a borrower has lost their job or their child is sick. These are the borrowers that lenders want to hear from," Stout Migala said. "Tell them your story."

For borrowers whose homes are already in foreclosure, the workshop also can be valuable for its cathartic effect, said Thomas Lavelle, a spokesman for the Federal Reserve Bank of Boston, which co-sponsored the event with the Hope Now Alliance and NeighborWorks America.

"Some people come and hear what they don't want to hear, but even there they gain a sense of closure. They can move ahead and make a plan B," Lavelle said.

Dave's home is already in foreclosure. "Back in 2005, I was out of work," the 47-year-old father of three said. "Things were tight and I fell behind in my payments."

But now he's bringing home a regular paycheck, he said.

Dave said he won't know whether his lender will provide the workout he's hoping for until later this month. But after meeting with a loan representative Saturday morning, he felt optimistic.

"I don't know if it's going to get resolved, but I've gotten farther here than I've ever gotten on the phone," he said.

The other message Stout Migala gave homeowners Saturday was, "Don't pay a dime to anyone but your lender.

"There are thousands of companies out there that are charging borrowers and telling them 'we'll work with your lender'," Stout Migala said. "Anyone who charges, steer clear."

Instead, she said, distressed borrowers should call one of the federally approved nonprofit counseling agencies, whose services are free.

Inside the convention hall Saturday, hundreds of homeowners, their documents tucked into backpacks, envelopes and file folders, seemed to utter the same four words: "I lost my job."

"They cut my hours from full-time to part-time," said Paul, a 53-year-old Enfield postal worker, who asked that his last name not be used.

"My wife works, but I've got a 20-year-old daughter in college and two girls, 17 and 13, at home," he said.

"I'm three months behind on my payments," Paul said. "The mortgage is so high, $3,000 a month at 7.1 percent," he said, shaking his head.

But his mood picked up when he began to describe meeting with his lender: "He's was able to stop the clock. He's going to make other arrangements. I'm going to go home and tell my wife."