City, county offer help for foreclosure

About two years ago, Carey’s husband lost his job.

The number of home sales has been decreasing as more homes fall into foreclosure. Foreclosure filings were up 25 percent in 2009 over the previous year, according to a report released by the City of Longmont. Josh Long photo

Besieged with huge medical expenses and struggling to save their home, the family split their $1,600 mortgage into two monthly payments of $800 each. But the lender started tacking on late fees.

“They would pay off those late payments and we wouldn’t have the full mortgage payment,” said Carey, who asked not to use her last name to protect her family’s privacy.

In April of 2009, the local mortgage lender — a titan in the financial services industry — informed the Longmont family they were covered under a program that would help them. But that turned out to be false.

Late last summer, the lender delivered some distressing news: “If we (didn’t) come up with some huge dollar amount, our house is going to be taken away,” Carey recalled.

On the brink of foreclosure, the family contacted the Boulder County Housing Counseling Program. County staff helped them apply for the national Home Affordable Modification Program (HAMP). Their mortgage has now been reduced, with the interest rate roughly halved.

“There is no doubt in my mind without (Boulder County’s) help we would have lost our home,” said Carey, whose husband now works three jobs to make ends meet, earning a fraction of his former pay.

Other Longmont families are not so fortunate. In 2009, the number of foreclosure filings increased 25 percent to 722.

“Foreclosure filings represent the point at which the legal foreclosure process begins,” according to a Colorado Division of Housing report issued last year.

A report released by the City of Longmont in February — “Introduction to the City’s Housing Programs” — attributes the increase in foreclosure filings primarily to “the result of adjustments to ARMs (adjustable rate mortgages) issued about three years ago and a residual impact from a moratorium on foreclosure filings from the previous year.”

ARMs offer borrowers a fixed interest rate for a period of years before loans are subject to a substantial hike in the interest rate.

“Payment increases dramatically and most people aren’t equipped to handle that right now understandably,” said Deanna Dyer of Dyer Realty, president of the Longmont Association of Realtors.

A family that is facing economic hardship should contact a Boulder County housing counselor sooner rather than later, said Kathy Fedler, Community Development Block Grant and Affordable Housing Programs Coordinator for the City of Longmont.

“People should call them before they get the foreclosure notice,” Fedler said. “The earlier folks get involved the more options people have.”

Some borrowers who can still afford to make monthly payments may be able to modify their loan terms, salvaging their home.

“Borrowers who cannot make ongoing monthly payments may need to consider a short sale or deed-in-lieu in order to avoid foreclosure,” said Tonja Ahijevych, Housing Counseling Coordinator with the Boulder County Department of Housing and Human Services. “The Boulder County Housing Counseling Program is available to meet with people one-on-one to help them understand and access the options that best fit their situation. All services are free and confidential.”

If a borrower has received a foreclosure notice from the Boulder County Public Trustee’s Office, the homeowner will have between 110 and 125 days before the scheduled home sale, Ahijevych said. The Boulder County Public Trustee’s Office declined to comment for this story.

“During this time, they (homeowners) can still work with (a) Housing Counselor to possibly avoid foreclosure,” Ahijevych said.
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