It’s every homeowner’s worst nightmare. While sifting through the mail, they notice those huge, foreboding letters staring back at them. Foreclosure. The word hits them like a punch to the gut. Their face goes flush. They can almost feel the blood rushing down their legs. Their heart stops momentarily, then begins to pound like a techno beat. They have thirty days to pay and no idea what to do next.
This is the situation that thousands of Philadelphians are faced with on a daily basis. Although the housing crisis has been replaced as the hot topic in the news as of late, it doesn’t change the fact that people throughout the city are still in danger of losing their homes, many of whom have no idea where to turn.
In West Oak Lane, the West Oak Lane Community Development Center (WOLCDC), along with Ogontz Avenue Revitalization Corp. (OARC), are fighting to help remedy this situation by offering free housing counseling to all who are interested.
“We are a comprehensive housing counseling agency,” states Tom Stafford, the director of the program. “We deal with all kinds of housing issues such as pre-purchase, post-purchase, debt, delinquency and foreclosure, which is a large part of our program right now.”
Rightfully so, more people than ever are falling behind on their mortgages and are facing possible foreclosure. Only two years ago in West Oak Lane alone there were an estimated 2,000 to 3,000 foreclosures.
“About five years ago we started to see an increase in delinquency and over those five years it came to where it is now where about 60 to 65 percent of our clients are foreclosure or delinquency and only 25 to 30 are pre-purchase,” says Stafford.
The number of foreclosures peaked last year in the midst of the housing crisis. Stafford believes this is attributed to this rise of uninformed home buyers and owners falling for predatory loans.
“A few years ago there was a push to get people to refinance loans. They were predatory because they were at very high rates and they were sometimes adjustable,” he states. “It may last for six months, and then every six months that rate can increase. It becomes unaffordable and these people have nowhere to go. They can’t make the mortgage payments and it leads to delinquency and then on to foreclosure. That was prevalent for several years.”
There are two programs that WOLCDC/OARC uses to assist people facing foreclosure. One is the Homeowners Emergency Mortgage Assistance Program (HEMAT), which is a state sponsored program that offers more loans to help people pay their mortgages at its current rate. The applicant must be approved to receive the loan. However, even if approved, it does nothing to change the mortgage.
The other is the Philadelphia Mortgage Diversion Program, which was launched in 2008 by Mayor Michael Nutter. The program helps people who are experiencing foreclosure or are having problems keeping up with their payments by bringing the homeowner and a representative of the mortgage lender, along with an arbiter, to negotiate a restructuring of the mortgage to make it affordable for the homeowner.
Of the two, Stafford prefers the mortgage diversion program.
“The [loan] modification is more preferable because it changes everything to make it more affordable and it doesn’t require them to actually get the HEMAT, which would be an additional loan to their current mortgage payment,” he says. “If you couldn’t afford the mortgage in the first place, you can’t afford both. So the ideal thing is to get them to a modification process and change that whole loan.”
The problem is getting the word out. Because the topics of delinquency and foreclosure are such sensitive subjects, many people who are going through this dilemma are reluctant to seek help. Some people ignore the issue all together.
The WOLCDC/OARC-supported program, Saving Homes Saving Neighborhoods, is helping to remedy the situation. Three local outreach workers go door to door in the West Oak Lane community and participate in community events to ensure that people are getting the information they need about the programs and counseling that are available.
Although response to the program was limited at first, the program has grown due to recent successes. The number of callers to WOLCDC/OARC inquiring about counseling has increased through referrals and word of mouth in the community. Because of this more people are finding out that foreclosure and delinquency can be overcome. Success is found by obtaining as much information as possible about the situation and taking advantage of the free programs set up to help people keep their homes.
“It’s helping a lot of people,” Stafford beams. “In particular the diversion program is pretty successful. I would say maybe about 50 percent of the people that come in and have the hearing are getting some level of recourse.”
Keeping people in their homes is key to the growth and survival of any community. With programs like HEMAT, Saving Homes Saving Neighborhoods and the Philadelphia Mortgage Diversion Program, West Oak Lane will continue to grow and evolve.
For more information, contact the West Oak Lane CDC/OARC office at 215-224-0880.