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Many in need of help, but few attend foreclosure hearing

Photo

Photo by Bill Olmsted

Bob Cullen, a vice president with the Bank of Milton/Edgerton discusses the way a homeowner facing foreclosure can approach a bank. Cullen was one of nine panel members in a hearing sponsored by Rep. Kim Hixson that was looking into the foreclosure situation in Rock County and the state.

Photo

Photo by Bill Olmsted

Edgerton's Scott Strouse explains his frustrations in trying to solve his financial problems. Strouse, who is in danger of losing his home, attended a public hearing for those seeking help.

EDGERTON — Scott Strouse's story has become common in Rock County.

When the Edgerton man was laid off in December, he thought the family would be OK.

Then his wife got sick and couldn't work. Next the family vehicles needed costly repair.

Now, he and his family are in danger of losing their house. Banks won't help him because he doesn't have an ideal credit score, he said.

The Speaker's Taskforce on Preventing Home Foreclosures was created to hear from people such as Strouse, though few came to a public hearing Monday.

Rep. Kim Hixson hosted the hearing, one of several around the state, at Edgerton Public Library. The taskforce will collect data from homeowners and housing officials for a report to the State Assembly.

Strouse was one of few homeowners to turn out Monday. Other seats were filled by representatives from community organizations and local media.

It's not that struggling homeowners aren't out there. Rock County saw 632 foreclosure filings through June 30, up 35 percent from the 467 filings in the first half of 2008.

Experts on the panel shared their experiences and advice. Speakers included a real estate agent, county officials and representatives from local banks and community organizations.

Officials said homeowners working with large banks have it especially difficult because they get lost in the bureaucracy.

That's what has happened to Strouse, he said. His lender so far has not been willing to refinance the loan or work out a viable payment plan, even though he has paid what he could, he said.

"I don't want to pay all my money to the bank then find out I'm out the door anyway," he said.

A large bank usually sends borrowers to a debt collector when they're less than three months behind, said Dina Gonzalez, education manager of Neighborhood Housing Services of Beloit. After that, they're sent to a loss mitigation department that can work out a loan modification.

Sometimes Gonzalez advises her clients to hold onto their money until they reach the three-month mark and can work out a payment plan, she said.

But Bob Cullen, vice president of Bank of Milton, said he would never advise clients to withhold payment if they have the money. At a small bank, your loan officer often is your debt collector, so you can work out a payment plan sooner, he said.

Many larger banks aren't participating in a voluntary stimulus program that allows struggling homeowners to refinance their loans, said real estate agent Paula Carrier.

"These people (the lender) won't modify (the loan)," Carrier said, gesturing at Strouse. "They won't play ball with them, won't give them a chance."

Speakers said more education and mediation programs and resources for homeowners facing short-term financial problems could help. Eldred Mielke, Rock County clerk of courts, said judges are eager to start a mediation program that would require lenders and borrowers to work together to try to avoid foreclosure.

But sometimes there is no solution, said Steve Hein of First Community Bank of Milton.

"Unfortunately, and as much as nobody likes to say it, not every situation is fixable," he said.

What you can do

Don't despair if you're falling behind on mortgage payments, said experts at the Speaker's Taskforce on Preventing Home Foreclosures hearing Monday.

Here are some tips they offered:

-- Contact your lender as soon as possible, even before you start missing payments, said Bob Cullen of Bank of Milton. If banks can work with homeowners, they're less likely to foreclose because it's not in their best interest, either.

-- Work with a credit counselor approved by the U.S. Department of Housing and Urban Development. That's the best way to avoid unscrupulous or fraudulent counselors.

-- Educate yourself before you get into trouble. Organizations such as Edgerton Community Outreach offer budgeting classes that teach you how to prioritize your house payments, said Executive Director Sarah Williams.

The taskforce offered a list of the following resources for struggling homeowners:

-- Making Home Affordable, a federal program to help customers of Freddie Mac and Fannie Mae refinance their homes: www.makinghomeaffordable.gov.

-- Tenant Resource Line for tenants of foreclosed properties: 1-877-238-7368

-- Homeownership Preservation Foundation: 1-888-995-4673 or www.995hope.org.

-- Neighborhood Housing Services of Beloit, a program that offers free credit counseling to anyone, whether or not they live in Beloit: (608) 362-9051 or www.nhsofbeloit.com.

-- Edgerton Community Outreach offers financial and other assistance for residents of northern Rock County: (608) 884-9593 or www.edgertonoutreach.org.

-- Wisconsin Foreclosure Assistance Resources Center: www.wisconsinforeclosurekit.org.