Grant may help homeowners

About 1,000 Triad homeowners may have a better chance at avoiding or stalling foreclosure proceedings because of a federal grant provided to a local nonprofit agency.

Consumer Credit Counseling Service of Forsyth County Inc. received the $237,132 grant last week from the National Foreclosure Mitigation Counseling Program, which was created by Congress. The agency covers 14 counties - Alamance, Alleghany, Ashe, Davidson, Davie, Forsyth, Guilford, Iredell, Randolph, Rockingham, Stokes, Surry, Wilkes and Yadkin.

The local grant represents 8 percent of the $3 million allocated to the N.C. Housing Finance Agency by the national program. The money is available now and has to be used by Dec. 31.
The local agency said that the grant will be used to pay for one-on-one counseling for homeowners who are in danger of losing their homes. The agency said that it plans to add financial counselors and administrative staff to meet the tracking and reporting requirements of the grant.

"With the alarming number of homeowners faced with foreclosure today, initiatives like this are needed more than ever," said Peter Laroche, the president and chief executive of the local agency.

The national program identified the Greensboro-High Point and Burlington metropolitan statistical areas among communities in the state in greatest need of additional money for homeowner counseling.

There were 499 foreclosure filings in February in the Greensboro-High Point MSA of Guilford, Randolph and Rockingham counties, according to RealtyTrac.com. By comparison, there were 206 in the Winston-Salem MSA of Davie, Forsyth, Stokes and Yadkin counties.

"Many homeowners wait until they have fallen one or two months behind on their mortgage payment or received a notification that they could lose their home before seeking help," said Kathy Banks, the director of counseling with the local agency. "We recommend homeowners come to us before they reach those steps."

Economists say that the housing crisis is not going away anytime soon.

The Winston-Salem MSA was projected to take a $72 million hit related to foreclosures this year, according to a national forecast released in November at the U.S. Conference of Mayors in Detroit.

Global Insight, a research company based in Lexington, Mass., projected that foreclosures would have a $1.2 billion effect on the Charlotte-Gastonia-Concord metro area, along with $590 million on Raleigh-Cary and $450 million on Greensboro-High Point.

If the local economic blow from foreclosures is going to be softened, financial and consumer-advocacy officials said, it's not likely to come from federal foreclosure-prevention programs that have had mixed results since being introduced in December.

They said that those programs are limited in which homeowners qualify, with those already in the foreclosure pipeline or behind more than 60 days on their adjustable-rate mortgage payment being out of luck.

Instead, the officials said, it will come down to two factors: Struggling homeowners confronting the reality of foreclosure and getting help, and mortgage lenders and servicers voluntarily throwing out more potential home preservers.

Banks said that the agency serves as a middleman between homeowners and their lenders, assisting with requests for loan modification, writing hardship letters and setting up payment catch-up plans.

"We're seeing a greater effort locally from lenders being more flexible in finding options for avoiding foreclosure," Banks said. "Many lenders want to know whether the homeowner will be able to resume regular payments after a period of hardship."

Banks said that homeowners who are in denial about the status of their mortgage are more likely to lose their residence to foreclosure.

"It's not to the homeowner's advantage to stay in a home they know they can't afford long term," she said.

Connie Helmlinger, a spokeswoman for the N.C. Housing Finance Agency, encouraged homeowners to ask for help sooner than later because of the increasingly tighter credit crunch.

"Banks already are tightening their lending standards, affecting many homeowners who need to refinance their adjustable-rate mortgage loans before they reset to a much higher rate," Helmlinger said.

On Friday, Wachovia said it was revising the underwriting policies in its mortgage-loan business to reduce exposure to risky home loans.

"It will be interesting to see in six to nine months whether the grant money had a measurable impact on slowing the foreclosure rate in the Triad and across the state," Helmlinger said.