Struggling homeowners not tapping mortgage services
Phoenix Business Journal - by
Mike SunnucksDistressed mortgage borrowers have numerous avenues for assistance as they face financial burdens related to their home loans and the down housing market.
The problem is, troubled homeowners are reluctant to take advantage of loan modification programs and other aid related to the subprime and foreclosure mess.
“Homeowners do not want to deal with the situations they are in, so they don’t call, open mail or make contact,” said Carolyn Mitchell, community development manager for
Wells Fargo Bank.
Homeowners generally want to keep their financial woes private, she said. Some are unsure about who to call, she said, while others simply don’t believe they can be helped out of their predicament.
Wells Fargo, like other lenders, set up loan modification lines and participates in other foreclosure prevention programs. For example,
Hope Now — a partnership involving lenders, housing and consumer assistance groups — assisted 6,600 Arizona homeowners during the first three quarters of the year.
Anne Hilby, spokeswoman for the Arizona Attorney General’s Office, said the state has received more complaints this year related to mortgages and real estate, but she said homeowners often are hesitant to report such problems, including legal issues.
“Our office has found that many times, borrowers facing foreclosure are overwhelmed by their situation and embarrassed to seek help,” she said.
State Housing Director Fred Karnas said Arizona’s foreclosure help line has gotten more than 9,400 calls since it launched in May, but many borrowers are skeptical about coming forward because they are worried they will get in trouble if they fudged their original mortgage application.
“They don’t know who to trust,” Karnas said.
Arizona has the second-worst foreclosure rate in the U.S., with one of every 149 households in some stage of the foreclosure process, according to
RealtyTrac Inc. Nevada has the worst rate: one of every 74 households.
The
State Bar of Arizona set up a foreclosure and bankruptcy assistance program in February through its
Arizona Foundation for Legal Services & Education.
Foundation education and information manager Leslie Ross said the Web-based assistance program links low-income homeowners with legal aid, and other individuals to bankruptcy and financial attorneys who can offer them counsel. Ross said between 200 and 300 consumers have used the Lawyers Helping Homeowners service, but the State Bar would like to see more people take advantage of it.
“Most people who are in this situation are not used to seeking help,” Ross said.
Tanya Wheeless, president of the
Arizona Bankers Association, said consumers may be skeptical of their options, but they still should reach out.
“You can’t get help if you don’t ask for it,” she said.
Foreclosure Help Lines
Lawyers Helping Homeowners:
azlawhelp.org/housing.cfmWells Fargo Home Mortgage Loss Mitigation: 800-678-7986Arizona Attorney General consumer line: 800-352-8431Arizona Department of Housing Foreclosure Help-Line: 877-448-1211National foreclosure help:
www.hud.gov/foreclosure or
www.hopenow.com
