February 6, 2009

County Report

Foreclosure Relief

By Supervisor Dave Cortese
Special to the Times

It is impossible to miss the daily headlines and news reports that tell of the current state of our housing and mortgage sectors. We are faced with the news of lower property values, rising foreclosures and generally dire predictions about the future. Worse still is the prospect of trying to navigate through the current system if you are having difficulty in maintaining your mortgage and holding on to your home.

Here at the County, we are working hard with our counterparts at the state and federal levels of government to bring relief and hope to those homeowners in trouble. In this vein, I’d like to provide you with some basic references and ideas which can assist you, a neighbor, friend or loved one. I am thankful to those of you who have reached out to my office to seek assistance and also to provide information that we can use to help others.

The first step, should you find yourself in trouble, is to contact your lender. Their contact number is provided on your monthly bill statement. A word of caution; many times the bank you originally contracted with for your mortgage will sell your account to another organization, so be sure to consult your most recent statement. Make sure you are persistent. Lenders and companies who service loans are dealing with an incredible volume of calls. While that is not an excuse, it may take some time to reach a representative. It is also wise to keep a log of your conversations, including the name of the representative, the time and what was said. If possible, get a direct line rather than having to call in on the 800 numbers. If that person is not being helpful, you can ask to speak with a supervisor who might know of more programs that may help you.

It is very important to be honest with the lender. Explain your circumstance and let them know what you are able to pay. In working out a plan, lenders have many options available. They may offer a Loan Modification, which sometimes extends the life of the loan to make the payments lower. They also have Forbearance which allows you to make lower payments for a period of time. Make sure that if you agree to one of these workout options that you are being realistic and will be able to handle the new terms. It is important to continue to talk to the lender; while it may not appear to be the case, it typically causes them more trouble to put homes in foreclosure than it does to keep you in your home.

The federal government has allocated a significant amount of money to address the situations. They have monitored lenders to make sure they are responsive and come up with solutions other than foreclosures. The major lenders (Bank of America, Countrywide, Citi and Washington Mutual among others) have specific programs available. One of the new State laws protecting homeowners is California Senate Bill 1137. This law states that before a Notice of Default (the first step in the foreclosure process) is filed, the lender must be diligent in reaching you and talking about your circumstance.

The best place to start if you want to check into an entirely new loan is the Federal Housing Administration (FHA). The government has given the FHA expanded limits so please visit www.fha.gov for their list of participating lenders. They also are promoting the HOPE NOW Alliance which includes a number of counseling organizations and HUD intermediaries. This Alliance is designed to reach and support as many homeowners as possible in order to keep them in their homes. They can be reached at 1-888-995-HOPE (4673) or at www.hopenow.com.

If you need some expert counseling specific to mortgage problems or want some timely tips, try these two Web sites: www.hud.gov/counseling and www.hud.gov/foreclosure. Many cities have resources linked to their Web sites, so take advantage of all the information you can. Remember, be persistent and be in contact with your lender. The last thing they want to do is foreclose.

One of the most important pieces of advice that I can give you is to be extremely careful if you are ever approached by a person or organization that promises to help. It is unfortunate, but in times like we have now, there are many people who will try to take advantage of you. The last thing you need is to have an unscrupulous organization take more money from you.

Please contact me at (408) 299-5030 or by email at dave.cortese@bos.sccgov.org if you have any questions or want to access additional information. My staff is ready to help you and as a community, we will get through these difficult times.