HUDSON – Sixty-five city residents stand to lose their homes because they are behind on taxes. City Treasurer Eileen Halloran, who knows about the situation better than most, presented an evening program last week at St. Mary’s School to try to help those homeowners. A panel of 10 experts on mortgages, banking, taxes and finance spent two hours sharing their knowledge with a rapt but small audience of 16.
In her introduction Ms. Halloran referred to “deep delinquencies” and said that people could pay on an installment plan that is new this year. Perhaps a job loss led them to pay for heat, food, or medication instead of taxes, she speculated.
“In the future, none of us will be able to buy what we can’t afford,” said Seth Rapport, who has assisted home buyers in finding mortgages as head of Valley Mortgage for 15 years. Describing a situation seen in recent years more frequently in other parts of the country, Mr. Rapport said people got mortgages in recent years for homes more expensive than their incomes warranted. “People in the investment world saw a good opportunity,” he said. He’s seen people with no money, job or income get loans with no money down. “If you did this, you need help,” Mr. Rapport said. But times have changed. “Now, if you don’t hit all the marks, you won’t walk into a loan,” he said.
Stephanie Lane of Housing Works spoke about the emotionally devastating experience of foreclosure on people who “lost jobs, had medical problems or are under-employed.” Not planning for unexpected expenses and not looking at the full cost of the loan, including principal, interest, taxes, and insurance, are mistakes a lot of people make, said Ms. Lane. Her organization works with homeowners on developing sustainable budgets, and tries to help those facing foreclosure develop financial strategies.
An important first step for those facing foreclosure is communicating with their lender, said Steve Nelson, chief lending officer from Bank of Greene County. Then you have to come up with a number and a plan, he said. He warned those present about foreclosure scams that take advantage of people who are down on their luck. “They target people who are equity rich but cash poor, offering to bail people out who are willing to surrender title to their real estate. They charge exorbitant fees and sneak clauses beneficial to themselves into the fine print of the agreement,” he said.
Sometimes people run into problems because their mortgage has been sold and they don’t know whom to contact. Banks can provide a lot of community service even if they don’t hold your mortgage, he said.
Experts also advised the following:
*Homeowners should find out whether they have mortgages backed by the Fannie Mae or Freddie Mac. HARP (home affordable refinance program) is for those with stable credit whose homes have lost value; HEMP (Home equity modification program) is for those who are behind in payments might be helpful. It’s key to find out who owns a mortgage, she said.
*Anyone 62 or older could qualify for a reverse mortgage, which provides a way to access equity in a home to get cash to meet monthly obligations, said Steve Hack, a vice president from the Ulster Savings Bank in Kingston. A homeowner could get a lump sum, monthly payments, or a line of credit. When the house is sold, the bank gets paid back.
*The county Department of Social Services offers emergency assistance to some who qualify because they have children under 18, or because they earn a low income, said Karen Pollack. Food stamps and HEAP (Home Energy Assistance Program) can help the financially stressed make their money last longer. DSS also counsels people about obtaining health insurance.
*Gerry Adams from the Office for the Aging spoke about free legal services for anyone over 60 with no income requirement. The office also has a program to upgrade home insulation.
* Tina Sharpe, executive director of Columbia Opportunities, Inc. has seen those who lost jobs or apartments have a hard time finding another. “Major employers won’t hire you if you are unemployed,” she said. She also said that many programs may not be available soon because they are funded with federal economic stimulus money that “will run out soon.” That includes foreclosure prevention services.
With rents running around 600 a month many have found it affordable to buy when they can’t rent, she said. And that’s how some have gotten into the tight position they are in now. With foreclosures she said, “It’s a big surprise for renters that a home can be sold out from underneath them.”
“I think we’re just today starting to see the impact of the economic downturn,” Ms. Sharpe said. “I know we’re not prepared to deal with the fallout.”
One new wrinkle in this economy is that debts that are forgiven count as income and subject to income taxes.
A panelist who is a legal aid lawyer said she currently handling 113 active foreclosure cases and doesn’t see the trend ending anytime soon.
State law guarantees those under foreclosure a day in court, and the judicial process can make the situation better, she said. All people in foreclosure, not just those with subprime mortgages are now entitled to a hearing. She offered advice about how to prevent a bank from auctioning off a home in the foreclosure process. “You are entitled to a settlement conference. Be sure to go. That’s your chance to save your home,” said the lawyer.
The evening was recorded on video and DVD’s of the session will be available from Ms. Halloran.