The Adobe Flash Player is required to view this multimedia interactive. Get it here.

Foreclosure prevention program hoping to save more homes

How to save a home

Problem paying your mortgage? See this man

Is your “unlimited” data being throttled?
New 14 min. ago
Kasich wants 100 gigabits per second state network, smarter smartphones
2:07 p.m.
Cracker Barrel manager accused of embezzling $2K
2:07 p.m.
Benefit dinner held for girl who died in car accident
2:00 p.m.
Wright-Patterson relatively unscathed in Obama defense budget
1:46 p.m.
> More headlines

By Steve Bennish, Staff Writer Updated 6:43 PM Saturday, May 30, 2009

Alfred Patterson Jr., the former mortgage broker now leading County Corp’s outreach efforts to stem home foreclosures, is battling to keep financially overstretched homeowners safely under their roofs.

Everybody loses when a home is foreclosed, Patterson notes: the homeowner, the bank or lender, the neighborhood that ends up with a vacant house in it, the tax collector, and the community.

The mortgage crisis is so deep that Aaron Sorrell, manager of Housing and Neighborhood Development for the city of Dayton, equates it with the Great Flood of 1913 in the way it is remaking the cityscape.

The city will wield $4.5 million in state and federal funds to demolish a plague of vacant properties, potentially creating small parks or larger yards for neighbors.

According to an Associated Press report, a study by the Washington, D.C.-based Mortgage Bankers Association shows that a record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure, as the crisis spreads to borrowers with good credit.

The U.S. delinquency rate on home mortgages rose to a seasonally adjusted 9.12 percent and the share of loans entering foreclosure rose to 1.34 percent, the industry group said Thursday, May 28. Both figures are the highest on a record that goes back to 1972.

For housing stock — and homeowners — worth saving, County Corp has plans tailored to each household. The details depend on whether the loan originated with a subprime lender, Fannie Mae or Freddie Mac, or the Veterans Administration. Money is available from the Ohio Housing Trust Fund to help transition homeowners into more reasonable terms.

Patterson’s agenda is to make face-to-face contacts through church get-togethers, civic and neighborhood groups — even door to door.

As a former mortgage broker, he knows the turf.

“Since 1995, I worked as a loan officer. I got to see first-hand what happens when a person is saddled with a loan that is not structured correctly or they didn’t understand. I understand how people who are intelligent, rational and competent in other facets of their life can wake up and understand that they didn’t have a clue to the exact conditions of the loan they have,” Patterson said.

There is an important disclaimer, he notes: “If you are willing to put up your dukes and fight to keep your home, you have to make sacrifices.”

Sacrifices such as sticking to a tough family budget, Patterson said, at the same time acknowledging that some can’t be saved and bankruptcy is a realistic option.

To date, County Corp’s HomeSaver foreclosure prevention program hasn’t been as successful as hoped. Jim Martone, vice president for Housing and Administration at County Corp, hopes that will change.

The breakdown has been bleak. Only 237 households responded to a 2007 appeal sent to about 2,000 households at risk of foreclosure based on a review of mortgages. The appeal, in the form of a letter from then-Ohio Treasurer Richard Cordray’s office written on state letterhead, was sent on behalf of the HomeSaver program.

Of the 237 households that responded, only 99 visited the CountyCorp office on West Second Street downtown.

Thirty-three submitted to HomeSaver household budgeting to fix their financial profiles and make them eligible for lower interest rate loans. Forty were packaged to receive state rescue funds that could transition them into loans with better terms.

“Hopefully, they got it,” Martone said.

The upshot is this: While the program hoped to save hundreds, it has probably saved only dozens.

Martone’s program participant breakdown also shows that the mortgage meltdown is hitting members of the working middle class hard:

• The average age is 49.

• The average income, $32,000.

• The average real estate value, $79,000.

• The average interest rate of loans threatening to run a family out of the house was 9.22 percent.

It appears that miscommunication, overwhelmed lending institution staff, and missed opportunities are playing a role in the worsening landscape, Montgomery County Recorder Willis Blackshear said.

One homeowner who approached Blackshear said her bank told her she had to be three months behind in payments before they could help. She stopped paying her mortgage, and after three months was told by a bank that it couldn’t help after all.

“She never called anybody” else about the issue, Blackshear said. “At that point, she is in foreclosure.”

Blackshear concludes: “It’s hard to put a number on how many people can be helped. You need somebody who knows how to work the system and get the help early. We have to try to help some of these folks.”

Contact this reporter at (937) 225-7407 or sbennish @DaytonDailyNews.com.