How to avoid foreclosure
By Susan Shinn
For The Salisbury Post
Lou Adkins sits down at her desk and shakes her head. ěItís crazy around here,î Adkins says. ěI had 108 calls in December alone. Itís just crazy.î
Along with Robbie Stevens, Adkins is a housing counselor at Salisbury Community Development Corp., and the office has been working in overdrive for the last six months.
Fortunately, homeowners who are behind on their mortgage payments have another option.
Enacted Dec. 1, the Mortgage Payment Plan (MPP), replaces the Home Protection Plan (HPP).
Because Rowan is in a targeted county with higher unemployment, homeowners who qualify may receive up to 36 months of mortgage payments, up to $36,000, with zero-interest deferred loans.
The funding comes from $159 million of the federal Hardest Hit Program disbursed to North Carolina.
The three types of assistance available are:
Job search ó short-term assistance. Helps unemployed homeowners who are no more than six months delinquent in their house payments. Those who qualify can receive assistance for up to 18 months.
Job training/education ó long-term assistance. Helps the employed homeowner who is completing education. Those who qualify can receive assistance for up to 36 months.
Newly hired ó one-time assistance. Helps the homeowner who is recently reemployed. Those who qualify can receive a one-time payment of up to $36,000.
Adkins is glad the new program is available.
ěIt has picked up so much this past year,î Adkins says of the number of homeowners who have contacted the office, seeking help. ěThey keep saying we havenít hit the peak of foreclosures, but we certainly hope we have.î
Adkins is thrilled that she and Stevens now have help from Mary Powell, an intake specialist who assists with client referral and follow-up.
The MPP application, Adkins explains, is extensive. There are some two dozen documents which are uploaded in the process, such as income tax returns, bank statements, pay stubs and the like.
ěWeíre having weekly sessions to explain the process,î she says.
To be eligible, homeowners must be paying more than 31 percent of their income toward the mortgage, utilities, taxes and insurance, and the value of their home cannot exceed $275,000.
Adkins says this program is ěbridging the gapî for homeowners, to ěget people back on track and give them an opportunity to get retrained.î
Another option for homeowners behind in payments is a loan modification to reduce payments, which can be done in a variety of ways. If a homeowner has a great deal of equity, they may qualify for a reverse mortgage, receiving a loan on the equity line in order to make house payments.
ěYou have to have a lot of equity even to be a candidate,î Adkins notes.
Adkins advises homeowners who may be in arrears to contact their mortgage company.
Bob Setzer agrees.
ěForeclosures are continuing,î says Setzer, vice president for mortgage lending at F&M Bank. ěPeople are still being affected by the economy.î
Adkins counsels homeowners with whom she works to pay only the essential bills, which she defines as the house payment, the car payment, utilities and food.
ěAnd thatís it,î she says.
She adds, ěI had one client today who was paying $355 a month in credit cards but was two months behind in her mortgage.î
You have to prioritize bill paying, she says.
Adkins says that she and Stevens have had no indication that the economy is improving.
ěWe donít see how it can keep getting worse,î she says, ěbut thatís how it appears.î
The last six months of the year, she and Stevens each averaged 80 to 100 calls per month. Adkins has already had more than 70 calls in January.
The office also gets referrals from the N.C. Banking Commission when homeowners become more than 45 days late on house payments.
ěYou can exhaust a lot of avenues before you are foreclosed on,î Adkins says. ěIf homeowners have got income and they can make some payment, thereís usually a solution. Once they find a job, we can usually work it out.î
Again, Setzer concurs.
ěBe proactive, even anticipate. Once it gets to a certain point, thereís nothing we can do. But there are programs in place out there. You might have the chance to protect and save your house.î
For more information about the Mortgage Payment Plan, call Lou Adkins at 704-638-2154 or Robbie Stevens at 704-638-5383.
Freelance writer Susan Shinn lives in Salisbury.