New Hotline Helps Borrowers Avoid Foreclosure

Like an ever-growing number of homeowners these days, Robert Harrell found himself falling behind on his California mortgage payments.

The Richmond, Calif., resident started missing home loan payments in January as a result of losing his job and finding that the income from a pension and Social Security payments were not enough to keep up.

It’s an increasing problem these days.

Foreclosure activity has more than doubled in the past year in Alameda County, tripled in San Mateo County and more than tripled in Contra Costa and San Joaquin counties.

But unlike many homeowners who get a mortgage default notice from a home loan lender — the first step in the foreclosure process — Harrell did something about it.

When he received the notice in March, he picked up the phone and got the counseling he needed to avoid losing a home he has lived in for 31 years.

The result was that he was able to work out a repayment plan in June with his lender for a mortgage refinancing loan he had taken out in 2005.

The toll-free hot line he called — (888) 995-HOPE — was set up in June 2005 to provide immediate foreclosure counseling to borrowers who are having a hard time keeping up with their mortgages.

“They did a great job. I really appreciate them. We were able to work out a payment plan to stop my house from being foreclosed,” Harrell said.

The hot line number will be the focus of a national advertising campaign that kicks off Monday. The ads, which will be on TV, radio, in newspapers and on billboards, will start showing up in the Bay Area in July.

The idea is get the word out to borrowers about the hot line at a time when California mortgage foreclosure rates are rising.

• In Alameda County, lenders sent out 783 default notices for all types of mortgages in May, compared with 338 a year ago.
• In San Mateo County, 185 notices went out, up from 65 a year ago.
• There were 1,068 notices sent out in Contra Costa County last month, up from 283 a year ago.
• In San Joaquin County, 1,309 notices went out, up from 409 a year ago.

“Up to 50 percent of consumers who go into foreclosure every year never respond to the outreach from the lender. They get the (foreclosure notice) in the mail and don’t respond at all,” said Ken Wade, CEO of NeighborWorks America, a non-profit organization that helped initiate the hot line.

“We want to reach those consumers and provide a place they can call. They will tell us that they didn’t think the lender could do anything to help them. They didn’t think there there was anyone they could turn to for assistance,” he said. “Some people thought that the lender wanted the home. A (mortgage lender) is looking for payments. They don’t want the house.”

The California Association of Mortgage Brokers and the California Mortgage Bankers Association urge homeowners who are behind in their mortgage to contact their mortgage lender as soon as possible.

Foreclosures — and calls to the hot line — are on the rise as the monthly payments on many adjustable-rate mortgages are rising after the end of low introductory payments.

In the first three months of the year, some 7.57 percent of adjustable-rate bad credit mortgage borrowers were at least 90 days behind in their mortgage payments, compared with 1.22 percent of adjustable-rate prime borrowers.

Last year, the hot line received 24,000 calls nationwide. To date this year, it has recorded 35,000 calls.

And remember, homeowners facing foreclosure don’t have to wait until the ad campaign starts in the Bay Area or wait until they get a foreclosure notice from their mortgage company to take advantage of the hot line.

“That number is up and running now,” Wade said.

SOURCE: The Daily Review