Mortgage foreclosures are increasing in Yates County

Loujane Johns

Losing your home to foreclosure is a heart-wrenching experience.  Last year 84 properties in Yates County were in some stage foreclosure.  According to Yates County Clerk Julie Betts, two filings have been made already in 2008.  She agreed that the number of foreclosures is increasing.

The problem is not unique to Yates County.  Newspapers across the country have run stories on foreclosures since Realty Trac Inc. of Irvine, Calif. released year-end figures.  Realty Trac is a website marketplace for foreclosure properties and publishes the most comprehensive database for foreclosures.

According to their findings the national average is one in 100 U.S. homes are in some stage of foreclosure.  The figure has risen 97 percent since 2006 and activity has increased 75 percent in 2007.  The company reports there were 2.2 million filings on 1.3 million properties last year. The number of filings reflects the fact that home owners have more than one mortgage on a property.

New York State is listed as 21st place in the number of filings with 57,350 in 2007.  In comparison to the 84 in Yates County, Wayne County had 115, Ontario 147, Schuyler 52 and Seneca 19.

Kathy Disbrow, Director of Keuka Housing Council (KHC), a non-profit organization which works with low and moderate income housing needs, said they have seen a 33 percent increase in foreclosure counseling.  “In the entire year we saw 21 people in that situation, but 17 were in October, November and December.”

Rene Bloom is a trained housing counselor who works with home owners facing foreclosure. She cited job loss and the need to go on disability as the most frequent cause of home loss. 

The third factor she said is because some people should not get into home ownership to begin with. 

“I would never recommend a land contract.  People get into them with nothing in writing, only a verbal agreement or they don’t understand them.”  She also said new homeowners don’t realize it’s not just a mortgage to pay, there are taxes, insurance and energy bills.  If they lose their job and get behind, problems arise.

According to Bloom, reputable lenders find it easier to work with owners than to go through the foreclosure process.  She cautions home owners not to go to another lending source that offers help with saving your house from foreclosure.  These companies ask for up-front sums or may charge a high percentage rate.  When the owners can’t make payments, these predators leave the owner without a house and in financial ruin.  (An article in the Jan. 16 Chronicle-Express discussed these practices and gave tips for protecting against foreclosure.)

Some lenders will not talk to the home owner, but Bloom said KHC has had success in intervening. She cited one unfortunate incident in which a home owner fell behind two or three payments and then tried to pay.  The mortgage company refused the $2500 due on the payment and demanded $10,000 be paid.

Good news came from Community Bank Branch Manager Tom May.  He said, to his knowledge, he only remembers one foreclosure in the past five years and that was the result of the death of an owner.

“Community tries to work with people before foreclosure becomes a reality,”  he said. He believes the other local lending  institutions have the same philosophy.   Communication between banks and borrowers is a key, he said. 

May says he receives a list of past due mortgages and calls to talk with the borrower to find out what is going on in their situation when an account first becomes delinquent.  After 60 days talks get a little more serious. 

He spoke highly of the services provided by KHC and said he often refers home owners to the agency.

When people apply for a home loan at Community they are carefully screened.  They are asked, “What do you think you can afford?”  “This might steer a borrower into looking for a little cheaper home that better fits their budget. Local banks have an investment in the community, “ May said. 

The local bankers also have the advantage in a small town of knowing their customers. He cautioned borrowers to read the fine print, adding,  “A lawyer should always be involved with a home sale.  It is their job to read the fine print.”

“I have had several real estate agents contact me in the last few weeks, inquiring if the bank has any foreclosures for sale.  I was delighted to tell them, ‘no’,” said May.

Sub-prime lenders, on the other hand, make loans to people who don’t qualify for the best market rates often because of poor credit.  Throughout the country agencies including the FBI are investigating these unscrupulous lenders, who often falsify documents and encourage borrowers to do the same.

A national hotline, NeighborWorks America, has a foreclosure prevention hotline - 888-995-HOPE.  Since June 25 more than 200,000 homeowners have called seeking information. The hotline is a component of the NeighborWorks America foreclosure prevention awareness campaign.

As of Jan. 1, 2008 a New York Banking Law requires individuals to obtain authorization from the superintendent of Banks before engaging in mortgage  loan origination with respect to New York residential real estate.

Help may be coming to the area. Although it is too soon to know the local amount, KHC is hoping for some funding from legislation signed by Congress and President George W. Bush authorizing $180 million for a National Foreclosure Mitigation Counseling Program signed on Dec. 26, 2007.  Funds will be prioritized in “areas of greatest need.”

Help is available from many sources.  The home owner should not be afraid or ashamed to ask for help.   And the sound advice is: Call your lender at the first sign of a payment problem. If they are a reputable firm, they will probably work with you.