Help Available for Homeowners in Mortgage Crisis

By Jen Thomas - April 29, 2008
iBerkshires Staff

Pittsfield Mayor James Ruberto and Taylor Caswell of HUD.

PITTSFIELD — While the nation struggles to cope with a brutal mortgage crisis, local and state officials are coming together to offer options for homeowners who could face foreclosure.

At a press conference on Monday afternoon, Mayor James M. Ruberto joined U.S. Department of Housing and Urban Development Regional Director Taylor Caswell and Berkshire Housing Development Corp.'s Executive Director Elton Ogden to highlight housing resources and assistance programs available in Western Massachusetts.

"We're all aware and we're all concerned about the foreclosure statistics here in Pittsfield and Berkshire County," said Ruberto. "The statistics aren't just numbers. They represent real people and they represent people whose lives are being affected in incredibly negative ways."

The crisis that began last year is caused in large part by mortgage lenders providing home loans to people who are unable to cover the rising costs of the adjustable rates. At the same time, buyers who paid high prices for real estate are finding their equity has waned considerably as the housing market bubble burst — they're essentially trapped in mortgages for far more than their homes are worth while other costs keep rising.

According to Caswell, 140 foreclosures — at all stages — have been filed in the county in the last 180 days.

"It's tough to admit when there may be a problem but you have to do it because you can save your home," Caswell said. "Staying in your home is a big issue for people so I'd tell anyone who might face foreclosure to think ahead. If you get past 60 days due, you're in a tough situation. Seek help before you miss your first payment and ask 'What are my options?'"

"In terms of the big picture, 140 is not a huge number but for those 140 people, that's huge," he added.

Though the county - and the western portion of the state in general - is faring better than other parts of the country (notably California, Florida, Michigan and Ohio) exercising caution is recommended for homeowners who fear the prospect of foreclosure.

"It is important to emphasize time and time again, the time to get help is far before you expect a foreclosure," said Ogden, who also used the conference as an opportunity to announce an alliance with the Berkshire Regional Housing Authority to form what they will call the Western Massachusetts Foreclosure Prevention Center.

"Our two agencies have partnered to serve the Berkshires," he said. "By collaborating with agencies in the four western counties, we'll be able to provide more resources and do a better job. It's very important to get to the people who need help but we can take advantage of this time to send the message to those who aren't in trouble and who are looking to consider in-depth housing, especially at a time where interest rates are low and it's a buyer's market."

Ogden said he expects to make a formal announcement about the partnership in the first few weeks of May.

Caswell outlined HUD services, including housing council agencies and the opportunity to opt into a Federal Housing Administration loan. Under a new refinancing program, the FHA is offering homeowners the choice to refinance into a FHA-insured mortgage — called the FHASecure Initiative — if they are having trouble paying their non-FHA adjustable rate mortgage.

Caswell discusses options for homeowners facing foreclosure.

According to information provided by HUD officials, there are three HUD-certified counseling agencies in the county. Housing counseling agencies provide assistance to homeowners who are facing mortgage delinquency and default and assist families in becoming first-time homebuyers by helping them to realistically evaluate their readiness for a home purchase and understand their financing and downpayment options.

"When you're looking at foreclosure issues, it's not just the impact to the individual. For the community at large, it's substantial," Caswell said.

Caswell also said subprime adjustable rate mortgages account for approximately 10 percent of all mortgages but "that 10 percent makes up for 50 percent of all foreclosures."

High housing prices and job loss are the key factors behind foreclosures around the nation, Caswell said.

"We need to be pretty vigilant about watching the progression of job loss here, so we don't get into that kind of trouble," he said.

The three Berkshire County housing counseling services agencies are:

• Berkshire Housing Development Corp.: 413-499-1630
• Consumer Counseling Credit Services of Southern New England: 800-208-2227
• Berkshire County Regional Housing Authority: 413-443-7138

"I would encourage people to act early. Just do it for yourself, do it for where you want to be in six months." said Ogden.

Other resources:

Hope Now Alliance/Project Lifeline: Six major lenders (Bank of America, Citigroup, Countrywide, Chase, WaMu and Wells Fargo) have agreed to put a moratorium on foreclosures for borrowers who are seriously delinquent (90 days or more) while they work with homeowners one-on-one.

Mortgage Relief Fund: Five major banks in New England (Bank of America, Citizens, Sovereign, TD BankNorth and Webster Bank) have pledged to work with borrowers to try to refinance burdensome mortgages into new mortgages with better terms.

FHASecure Fact Sheet