Houston, TX – October 3, 2009 – (RealEstateRama) — Today, Houston residents attended a housing foreclosure prevention workshop hosted by U.S. Congressman Al Green (TX-09) and learned about strategies they could use to avoid losing their home, such as loan modification, refinancing services and assistance from the federal government.
According to a report from the U.S. Department of the Treasury, 992,554 homes were in the process of foreclosure as of June 30, 2009. The report also found that 5.3 percent of all mortgages were more than 60 days past due as of June 30 and that the worst categories for delinquency were subprime loans, at 17.8 percent, and payment option adjustable-rate mortgages, at 15.2 percent.
These mortgages —which allow the borrower to choose how much to pay each month, but can also increase the payments significantly— are of particular concern and could put hundreds of thousands of homeowners at risk of losing their home.
Option adjustable-rate mortgages can be particularly harmful for households affected by unemployment. According to the Treasury report, more than 15 percent of these types of loans were seriously delinquent during the second quarter.
“Our goal with this workshop is to inform the community about all the options and the help that is currently available, such as the “Making Home Affordable” program. Plus, overcoming the foreclosure crisis will also be a crucial factor for spurring the overall recovery of the national economy,” said Congressman Green.
Nearly 400,000 borrowers have been helped through the “Making Home Affordable” program since it was launched in March and the goal of the Obama administration is to complete 500,000 loan modifications by November.
Loan modification was one of the various concepts that the participants of the workshop learned about. “We are trying to explain to people that they must be proactive and contact their financial institution before it is too late in the process. If they get a phone call from their lender, they have to think of it as the bank offering a solution. The relevance of these events is the fact that we can make a direct connection with people that are going through this situation,” explained Laura Jaramillo, Manager of Corporate and Social Responsibility at Wells Fargo.
“The most important thing that we hope homeowners take away from this workshop is that they don’t have to face this alone. There is help available here in Houston and HUD-approved certified counseling agencies are standing by to help them understand their options. We can educate them about loss mitigation options and make recommendations based on their specific needs and situations,” said Ivan Hand, CEO of the counseling agency Money Management International.
Congressman Green also talked about the negative impact that foreclosures have in the communities where they happen. “We are even doing more than just helping individuals who are facing foreclosure, because by supporting them we are also assisting the communities where they live, in the sense that fewer foreclosures will stabilize property values. On the contrary, if property values decline then the tax base starts to erode and that can have a negative impact on schools, as well as Police and Firefighter services,” commented Congressman Green.