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Early action can prevent foreclosures

This Web only Speakout has not been edited.

Al Gold

Published January 9, 2008 at noon

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The Rocky reported this week that 2007 foreclosure filings in the seven-county Denver area almost doubled from record filings in 2006, when more than 18,600 people lost their homes.

Sadly in the past two years, Colorado consistently has ranked among the nation’s top states in foreclosure rates, according to RealtyTrac.

That includes homes in all price ranges – even $1 million homes.

We’re seeing more foreclosures because home loans are easier to get and adjustable rate mortgages are resetting beyond homeowners’ means.

We all bear the burden when our neighbors lose the American Dream of homeownership.

Not only do foreclosures destroy homeowners’ equity and ruin their credit, they also impact entire neighborhoods and communities. Other homes located near foreclosed houses lose value. And each foreclosure costs $30,000 to $50,000 in law enforcement services and lost economic development, according to studies.

There’s good reason to keep people in their homes. Research from the Center for Housing Studies at Harvard University shows that homeowners typically enjoy stronger family and neighborhood stability. Their children perform better in school, and they are more likely to participate in civic activities.

For the majority of Coloradoans, owning a home is the biggest investment of their lifetime, and the rewards of this investment are plentiful. Home equity can help fund children’s college tuitions, increase business opportunities and build nest eggs for retirement.

As predictions indicate growing foreclosures, there’s hope for struggling homeowners – but they must act early. Studies show that homeowners who are one or two payments behind are more likely to keep their homes than those further behind on their payment schedule.

The first step is to call a certified housing counselor. Counselors often are the first line of defense, helping homeowners work with lenders to develop a reasonable plan.

And in Colorado, a new state law that went into effect this month gives people who are losing their homes an extra 75 days to work out a deal with lenders.

In response to alarming foreclosure rates, NeighborWorks – the nation’s largest provider of certified homeownership counselors – and the Ad Council have launched a national public education campaign to connect homeowners to the Homeownership Preservation Foundation’s toll-free foreclosure counseling hotline, 1-888-995-HOPE.

The hotline provides free counseling 24 hours a day, seven days a week in both English and Spanish. The goal is to steer homeowners to trusted sources for help.

Answering calls on Colorado’s behalf are counselors from NeighborWorks organizations, including Westminster’s Colorado Rural Housing Development Corporation.

Homeownership is a win; foreclosures are devastating. In Colorado, too many of our neighbors are losing their homes. It doesn’t have to be this way.

Al Gold is the executive director of Colorado Rural Housing Development Corporation, a member of the national NeighborWorks network and one of only 96 NeighborWorks homeownership centers in the nation. Visit www.crhdc.org.

Comments

  • January 10, 2008

    10:14 a.m.

    Suggest removal

    vudumom writes:

    They didn't lose their home it's still there. What they lost was money to greedy Realtor,Appraisers ,Brokers and Lenders.What the majority of these people don't have is the ability to understand what they are signing.The buyer's agent does nothing but sit and collect their piece of the duped people's American dream.Everyone get's paid except the Lender who shouldn't have underwritten the poor loans in the first place.Some of the blame lies with home buyers,but what is a person to do when you have greedy people dangling the American Dream of owning your own home whether you can afford it or not. That's like asking a politician do you want my donation or should I give it to your rival.

    The lending business is set up so the average home buyer does not understand what they are signing means. On average there are at least 15-20 papers to sign and initial at a home closing.The average home buyer does not bring a calculator with them to the closing to crunch the numbers and see if they are right.I have bought,sold and refied many times in my life.I am fortunate to have a math genius husband. Every closing or refinance we ever have gone through with the exception of the last refi,the numbers have been wrong on the documents. Everytime except once in about 10 closings or refies.Once.We have had lenders tell us ,just sign the documents we will get them correct and send them to you. We have declined their offer. Don't sign unless the documents are correct or you really understand what your signing. Alot of people hire home inspectors before closing,which is a good idea.They also should spend a few hundred dollars for a real estate attorney if they can not comprehend all the documents that signed. It's well worth the money.The bottom line is greed took over the industry when rules were changed making it easier for people to buy a home but it also opened the door for widespread abuse by realtors,Appraisers,Brokers and Lenders.Greed brings out the worst in people.

  • January 11, 2008

    2:09 p.m.

    Suggest removal

    vudumom writes:

    I know for sure. My husband was a real estate agent in Maryland,Though he is not one now.He is also a math genius so he knows how to read the numbers and work them out on a calculator and at least 9 out of the ten times we have bought,sold or refied they have been wrong.
    When my husband took the college course to become a real estate agent,which was mandatory before taking the real estate exam. He had 50 people in his class. On the last day they had to take a test to pass the course.The Teacher told everyone to bring lots of sharpened pencils,a calculator and the test would take about 3 hours. My husband went in took the test and finished it in 45 mins. Everyone was looking at him like he quit,the teacher just took his test and raised his eyebrows.After a week he got a note in the mail from his teacher telling him he is the only one who got everything correct on the test.He said he had never seen anyone take that test so fast and not many in all his years of teaching got everything correct.

    So when we go to a closing or refi and my husband pulls out his calculator he will know if the numbers add up.Most of the time the numbers have been wrong. Maybe you should check your closing papers,if you know how. Good Luck!