Multiple options available for homeowners struggling with mortgage payments
EDITOR'S NOTE: This is the second story in a three-part series examining the prevalence of foreclosure in mid-Michigan. See the first story here.
It isn’t uncommon for housing officials who are elbow-deep in the state’s foreclosure crisis to agree that homeowners don’t always know where to turn for help.
That is, at first.
While recent statistics show few numbers of actual foreclosures and subsequent property sales, especially in mid-Michigan, some would say there are just as many people, if not more, reaching out for help when they run into trouble making their monthly mortgage payments.
Teagen Lefere said she assists five new people a week as a state-certified housing counselor at Listening Ear Crisis Center in Mount Pleasant, and a large majority of them are there for foreclosure.
“But if I read the newspaper and there’s foreclosures listed everyday, I very rarely recognize the names,” she said. “There are people who are either doing nothing (or) don’t know they can do something. I’ve had people who’ve been doing this on their own for a year. And it’s no cost to them.”
Lefere said she spends much of her time sifting through paperwork as the in-between for homeowners and their lender and also helping the two parties reach some sort of conclusion that allows clients to keep their home.
Most of the time, she said, it’s “just a hardship that’s beyond their control” and that lenders are “not really giving them any breaks.”
The help available
Listening Ear counsels people on foreclosure who are from several counties surrounding Isabella County, Lefere said.
However, there are several additional options for assistance through the Michigan State Housing Development Authority, including programs that actually help homeowners pay their mortgage.
"The biggest problem we have in delinquency is unemployment or underemployment," said Mary Townley, director of MSHDA’s homeownership division. "I don't have the ability to fix that, but I do have the ability to be creative enough to partner with our other state agencies to come up with some sort of assistance for those homeowners."
Townley pointed to recent statistics and said the state saw 416,000 foreclosures between 2005 and 2010. The severity of that later year, she said, helped get Michigan federal funds designated to “states deemed to be hit the hardest.”
The country’s Troubled Asset Relief Program shelled funds toward the start of the crisis, according to the U.S. Treasury Department. Townley said Michigan was one of the first five states to receive money with $16 million coming in.
The end result was StepForwardMichigan.org, which explains how funds can help homeowners supplement their mortgage for up to 12 months.
“They get half way through (the application) and for whatever reason they never complete it,” Townley said. “There's another great percentage of households who fill out the application, but they never send us their documents."
With the state’s economy allowing fewer local opportunities, such as housing counseling to be funded, Lefere said it’s especially important for people struggling to realize what the options are. She said at Listening Ear, she is the sole worker to service multiple counties.
Hard advice
Both Townley and Lefere said there are two big pieces of advice when it comes to foreclosure — the first being for people to seek counseling prior to buying a home.
The second is for people already struggling with mortgage payments to never pay anyone but their lender. This is something a recent client of Lefere’s nearly learned the hard way.
Bill and Pam Phillips had been struggling with foreclosure when an outside agency told them it needed to send a representative to their Barryton home to collect a fee in the hundreds of dollars. The aim was to receive some relief with the couple’s monthly payments.
But Pam told Lefere. On Tuesday, Pam referenced the incident, recalling it as something that seemed like "a little bit hope" but turned out to be a scam.
"They play on your heart," she said.
Scams aren’t unusual, Lefere said, though there is other information homeowners ought to be cognizant of while seeking help.
Above all, she said, communicate well with whatever company serviced your home loan, especially if you run into a loss of income.
Credit to the counselor
The Phillips attribute much of why they're keeping their home — for now — to Lefere for going what Pam called “that extra step.”
Bill called her “a beautiful personality,” while Pam said she approached them without judgment, helping feel relief from the stigma that “you’re a bad person because you don’t pay your mortgage.”
Lefere said foreclosure clients come to her at a variety of stages, whether they merely foresee a future issue with their mortgage or are in woe over their home’s auction date the following week.
And the amount of time clients’ cases are wrapped up is just as broad, she said, with some ending as soon as three months and others taking as long as three years.
But getting people “mortgage-ready” is what she said she was originally trained to do in 2007 — before the foreclosure crisis really erupted.
“Ideally, when this foreclosure crisis is over,” Lefere said, “I can concentrate more on homebuyer ed.”
