DETROIT FREE PRESS
POSTED: MAY 24, 2010

Free programs ease homeowners' burden

BY GRETA GUEST
FREE PRESS BUSINESS WRITER

Thousands of distressed Michigan borrowers are frustrated over the long waits to get a loan modification.

But homeowners don't have to go it alone. There are dozens of free programs to choose from. And yet too few people who are having trouble making mortgage payments are reaching out for the free help available, housing counselors say.

Jamele Hage, executive director of the Wayne County Foreclosure Prevention Program, said her counselors do what it takes to resolve a borrower's case. The average loan modification takes six months to two years to resolve.

"We know ... what the law says," she said. "If it gets escalated, I will escalate it all the way to the U.S. Treasury for people."

The program is among several that are either taxpayer-funded or nonprofit, such as GreenPath Debt Solutions, credit counselors based in Farmington Hills. A full list can be found at Web sites for the U.S. Department of Housing and Urban Development, or for the Michigan State Housing Development Authority.

Counselors work with lenders

John Hoffa, 57, got a permanent loan modification on his Brownstown Township home with the help of a foreclosure prevention program.

So much free help is available to people, but many don't reach out to get it.

Hoffa, whose great-uncle is the late union leader Jimmy Hoffa, said he's unemployed but works on a contract basis with a former EDS colleague who started a computer salvage company.

He started working on a loan modification on his own in 2006, before the Home Affordable Modification Program (HAMP) and other government programs were available. His paperwork kept getting lost, and he was close to foreclosure when he found the Wayne County Foreclosure Prevention Program. Six months later, he had the modification.

"We would have gone into foreclosure. We had already made plans to move into my mother-in-law's basement. That's how bad it was," Hoffa said. "We were ready to walk away from the house. We were fortunate that we didn't have to."

Don't give up; there are options

Jamele Hage, executive director of the Wayne County program, which recently branched out to include Macomb, Oakland and Washtenaw counties, said the loan-modification process can be overwhelming for people. Her credit counselors take a lot of weight off the shoulders of individual homeowners.

"Our counselors really know what they are doing. We take responsibility for individual cases. I think that makes a difference," she said.

The program launched in October 2008 and has nine housing counselors in Wayne County with a network of 55 others who help with cases.

In rare cases, Hage's counselors are able to get settlements for people. For example, a Detroit woman had her $150,000 loan written off after two years, said Micah Glenn, who worked with her.

"I'd like to tell you that it was all me, but it wasn't," he said. "That is a lender decision. ... In those areas where you have a tremendous amount of inventory, you are more likely to do a settlement."

Glenn, who spends his days on the phone with servicers trying to find out what is happening with homeowner cases, said banks are getting better. He's not getting as much of the runaround or lost paperwork.

He said the best thing that homeowners can do is have realistic expectations. And not give up. "We tend to throw our hands up and say, 'There's nothing we can do,' " Glenn said. "But there are options for people. You can get the reinforcement from someone who speaks the language and has the time to follow up."

Banks are starting to change

Another free program that helps people get loan modifications is run by Central Detroit Christian. The faith-based nonprofit group, approved by the state housing department, launched a mobile foreclosure prevention effort last winter.

It set up an office at Redford Township's town hall and has an agreement to offer services in Livonia and at its Detroit headquarters.

Antoinette Gray, the group's housing director, said her counselors have helped hundreds of families navigate the loan-modification process since last fall.

"We are now in a different day and age. Banks have started to change," she said. "Banks are starting to get the 'Aha!' moment with HAMP and other programs."

Help with living on less

Homeowners who work with either Central Detroit Christian or the Wayne County Foreclosure Prevention Program are required to go through an educational session that includes information about the housing crisis and foreclosure process.

Setina Briggs, housing program manager at GreenPath Debt Solutions, nonprofit credit counselors based in Farmington Hills, said that many people seeking loan-modification help are unemployed or have lost wages.

"Some homeowners who have received reduced monthly mortgage payments are still experiencing financial difficulty and have defaulted on their trial payments," Briggs said. "Homeowners are finding that while they may get a reduction on their mortgage payment, all their other expenses -- like utilities, groceries, car payments, insurances, etc. -- are the same and in some cases, are increasing, which causes further hardship when your income is reduced."

GreenPath has seen a 32% increase in mortgage-delinquency counseling sessions for Michigan clients for the three months that ended March 31, compared with the same period a year ago.

Contact GRETA GUEST: 313-223-4192 or gguest@freepress.com
http://www.freep.com/article/20100523/BUSINESS04/100523008/Get-your-loan-modification-questions-answered