In The News

Tabor has never seen anything this bad; the good news is that there's more help available than ever for those in danger of losing homes.

By HELEN COLWELL ADAMS, Staff Writer
Front page
Sunday News
Lancaster, PA
Jan 25, 2009

Gladys Delgado reads the sheriff sale listings every time they're published.

She's looking for names — names of clients she's seen at Tabor Community Services, where Delgado is the default mortgage counselor.

Most often, the homeowners facing foreclosure aren't her clients.

That's a situation Tabor would like to change.

Because while the economic news locally and nationally has been bleak — soaring adjustable-rate mortgages, rising foreclosure filings, sheriff sales, layoffs, collapsing stock prices, increasing rates of homelessness — there's more help available for financially stressed families than ever before.

The trick, though, is knowing where to get that help. That's where Tabor, the nonprofit housing and consumer counseling agency, comes in — with free assistance.

"We have a tremendous track record of helping people," said Phyllis Stacks, the agency's vice president for development.

Tabor thinks that track record, coupled with new state and federal programs designed to assist distressed homeowners, may help to explain a slight decline in actual numbers of sheriff sales in Lancaster County over the last few months.

As the mortgage crisis that hit in 2007 morphed into a full-fledged recession, Tabor has been adding staff to try to keep up with a growing caseload that's on track to be 86 percent higher than in the previous fiscal year.

Early in the credit crunch, Delgado and the other counselors were seeing mostly middle-class homeowners unable to afford their adjustable-rate mortgages. Now, though, the clientele is increasingly people who have lost their jobs and can't pay their mortgages.

"There are," Delgado said, "a lot of empty houses out there."

Losing homes
Across the country, housing experts expect the recession to drive up rates of foreclosure and sheriff sales, resulting in more people becoming homeless.

A report by the Washington, D.C.-based Center on Budget and Policy Priorities noted that while national figures on homelessness for 2008 have yet to be tallied, state-by-state numbers indicate an ominously rising homeless population.

The report also said both homeowners and renters are being displaced by the mortgage crisis; nationally, at least 20 percent of foreclosed properties are not owner-occupied. If a landlord defaults on the mortgage, even tenants who are current on their rent end up on the street.

Delgado noted that Fannie Mae, the federally backed mortgage agency, has decided to allow tenants to stay in foreclosed rental properties, but not all mortgage holders will do the same.

Rising foreclosures also have driven more homeowners into the rental market, with the result that even while median home prices are falling nationwide, rents are climbing. In Boston, rents have increased 12 percent since 2005.

In Lancaster County, traditionally more insulated from wide swings in the national economy, the situation isn't quite as bleak. But it's worse than Tabor staffers ever remember.

Delgado counted 165 properties on a recent sheriff sale list.

"I had never in 20 years seen anything like that," she said.

Chief Deputy Sheriff Mark Reese, who manages the sales, said 225 properties are listed for sheriff sale in the next round, Wednesday, Jan. 28.

He noted, though, that a number of homes usually are taken off the list by the time the sale arrives, indicating homeowners have made an arrangement with the mortgage holder.

Foreclosure filings are on the rise countywide, Reese said — the county prothonotary's office expected more than 1,100 in 2008, a record — but the sheriff's office sold 312 properties in 2008, up only nine from 303 in 2007.

Sixty-five were sold in January 2008, 64 in March, 55 in July, 45 in September and 36 in November, he said.

The difference between foreclosure filings and actual sheriff sales, Reese said, may indicate either that county lenders are more conservative than in other areas — or that more homeowners in this county are finding help for troubled finances than in other places.

Help on the way
Tabor thinks the second possibility is more likely, in part because the agency has been working to avert foreclosures by utilizing state and federal initiatives designed to keep homeowners out of sheriff sales.

From July 2007 through June 2008, Tabor counseled 242 households on mortgage relief, resulting in 96 percent of the clients avoiding foreclosure. Another 163 senior citizens were counseled on how to get a reverse mortgage, which uses home equity to provide income for the homeowner.

Pennsylvania was the first state in the nation to help homeowners who had fallen three months behind on their mortgages through the Homeowners Emergency Mortgage Assistance Program, or HEMAP. When owners receive an "Act 91" letter from their mortgage companies warning them that they're three months behind, they have 30 days to contact a mortgage counselor for HEMAP help.

The Pennsylvania Housing Finance Agency, which runs HEMAP, recently began paying for counseling for homeowners even before the three-month mark. Lowell Jantzi, division manager of Tabor's financial and homeownership services, was alerted earlier this month that PHFA will begin paying attorney fees for homeowners in certain situations.

Delgado noted that changes in state and federal laws in the wake of the mortgage crisis have made it easier for homeowners with conventional mortgages — those not offered through the Federal Housing Administration or U.S. Department of Veterans Affairs — to deal with their banks or mortgage companies.

"Once there was no help for people in conventional loans," she said. Now banks and mortgage companies need to work with homeowners who are behind on their payments.

There are no caps on income to qualify for help with foreclosure.

It's frustrating to Tabor counselors that many homeowners are paying for-profit agencies rather than conserving scarce resources by visiting Tabor, which is free.

One of Delgado's clients paid $1,800 for mortgage counseling. One of senior counselor Randi Shober's clients paid $2,500.

"And nothing was done," Shober said.

"And they end up back here for us to help," Delgado added. "They're out of money."

Lucy Mannix, a marketing and communications specialist with Tabor, said the agency takes a preventive strategy: "helping people before they get to Act 91," meaning they're three months behind on the mortgage, and "helping renters to stay out of the shelter system" and in permanent housing.

One of the biggest challenges is convincing people to ask for help early.

"I'm seeing people coming in six to eight months, a year behind" on their mortgages, Delgado said. In some cases, they didn't want to open the warning letters that had been arriving from their lenders. The longer people wait, the harder it is to find a solution.

The good news: "There is a lot of help out there for people," Delgado said. "They've just got to be informed."

Still at risk
The good news is balanced, though, by an ongoing wave of bad news that continues to put homeowners at risk.

Tabor is projecting 754 households will be enrolled in mortgage counseling programs for 2008-09 — an 86 percent increase from the last fiscal year.

Delgado, who used to be Tabor's only default counselor, has seen 200 clients already this fiscal year. Stacks said Tabor has added staff to try to meet the demand but still has a 30- to 45-day waiting list for an appointment.

In the early stages of the credit crunch, Delgado said, her caseload was mainly homeowners who had taken out adjustable-rate mortgages with low "teaser" rates. When the rates reset, they couldn't afford the new payment.

"I was seeing people with $100,000 jobs going into foreclosure, only because of the adjustable rates," she said. "That has changed."

With the recession widening, more companies are cutting jobs and laying off workers. Delgado's clients now are mainly unemployed homeowners with no income to pay the mortgage.

Shober said her caseload includes many small-business owners and self-employed people who are suffering loss of income because of the slow economy.

The Tabor staffers think the demand for their help will only increase in months to come.

Most people, Delgado said, can be helped. Those who can't, she tries to convince that selling their home doesn't make them a failure.

"It's not hopeless," she said.

"Some people think, 'If I lose my house, it's over.' … They can start again."

HELP FOR HOMEOWNERS
Tabor Community Services senior counselor Randi Shober suggests these tips for homeowners running into mortgage trouble:

1. Keep in touch with your mortgage company. Read any letters they send you. Act as soon as possible.

2. If you get a warning letter, don't call the collections department of your lender. Instead, ask to be transferred to the loss mitigation or "workout" department. That's the division most likely to come up with a plan to help you avoid foreclosure.

3. "Become very aware of your household budget and your spending. … You have to make choices."

4. Be aware of any changes that may be coming in your life. Is your employer downsizing? If you own a small business, what are its prospects? Are your children heading toward college? Those possibilities need to be factored into your decision making.

5. Don't be afraid to ask for help: "It's very difficult to put down your defenses and seek assistance."

6. Be creative with financial choices. Know what your talents are. Can you swap child care services with a neighbor, or ask at your church for a barter system for day care? Instead of giving gifts, can you give a gift of your time or talent? "Think outside the box."

In addition to its mortgage counseling services, Tabor offers a range of free financial literacy, budgeting and money management classes at its headquarters, 308 E. King St., and at sites around the county. For information, call 397-5182 or visit www.tabornet.org.