Foreclosure Solutions: Housing Help Centres Flooded With Calls for Avoiding Foreclosure

September 28th, 2007

In Philadelphia, housing counseling and assistance bodies are overwhelmed with SOS messages. For many house owners things have become worse by refinancing. The group – West Oak Lane Community Development Corporation - is all booked up, they have no elbowroom to accommodate the deluge seeking help to avoid foreclosure.

The former mentioned group is a non-profit organization and has started to register clients from November. With nearly 20 cases of foreclosures per month, they are employing two more persons. Foreclosure is a nationwide phenomenon. As adjustable rate mortgages reset for the higher notch more and more house owners are buckling under – their income just does not permit it. Most of those who had signed in for the sub-prime category are ignorant about the matter. They refinance from conservative mortgages to the sub-prime with higher interest rates for naïve reasons – minor house repairs and ready cash to spend. They just did not look beyond the present. In Pennsylvania, August saw foreclosures rise by 9.3% from last year.

The counties taking the worst beating are Philadelphia, Allegheny, Bucks, Chester, Delaware and Luzerne. Correspondingly the number of house owners seeking foreclosure help doubled since 2005. Hughes, the executive director of the group said that the city funds 27 counseling agencies. Each is manned by 2 or 4 counselors. The ones located in southwest and northwest Philadelphia are the busiest; on an average two foreclosure victims come knocking.

The work of the counselor is to firstly find out if the seeker qualifies for repayment plan and financial help from the state. The help may be in the form of a modified loan. The latter tries to change the terms of the same loan and not negotiate for a fresh one, as are done in refinancing. In the latter one has to pay a tidy sum for closing fees. It is not without reason that the lender gets into the soup. Sometimes there is death of an earning member or the elderly took loans without thinking of a tomorrow when his power for earning will naturally diminish.

The worst case is of the lender changing to ARM without knowing about it due to ignorance. Perhaps the letter of the law has been followed but it is not in the spirit of the law to give a senior citizen balloon loans or keep someone confused and in the dark about terms just because he or she is not financially educated.