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Rockefeller speaks at foreclosure discussion

July 20, 2010|By RICHARD F. BELISLE
  • U.S. Sen. Jay Rockefeller, D-W.Va.
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MARTINSBURG, W.Va. -- Thirty-five percent of all home foreclosures in West Virginia occur in the Eastern Panhandle, U.S. Sen. Jay Rockefeller, D. W.Va., told a group of area homeowners, housing counselors and real estate agents at a roundtable discussion Monday.

Representatives of the federal Department of Housing and Urban Development and the Federal Trade Commission were among the 16 participants at the session on foreclosure prevention at the Holiday Inn.

"I want to get into this," Rockefeller said, "to talk to the experts. I'm so angry that the (foreclosure) rate is so high here."

He criticized unscrupulous mortgage lenders, naming Countrywide Mortgage Company for one, "for pouncing on people when times are tough. Bank of America, which owns Countrywide, paid more than $100 million in settlements to homeowners, Rockefeller said.

Alan and Barbara Staats of Harpers Ferry, W.Va., had their own tale of mortgage woes when the bank foreclosed on their home.

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Barbara Staats told roundtable participants that she and her husband owned their home free and clear when they applied for a second mortgage to pay for some home improvements.

They ran into trouble with payments when their financial situation changed. They were three months behind when the foreclosure notice came. Staats said their attorney told them there was nothing he could to help. It wasn't until a neighbor saw their plight and became an advocate, shepherding them through a maze of lenders and agencies.

Having equity in a home does not stop foreclosures, according to several speakers. It has no bearing when applying for a loan modification on a troubled mortgage.

Sharon Kees and her fianc ran into trouble when both lost their jobs. They applied for a loan modification through their lender but were told they weren't eligible since both were unemployed. They were able to qualify only when her fiance found work, she said.

The loan modification dropped their mortgage payments from $685 a month to $625. Kees has lived in her home for 16 years and had an estimated $50,000 in equity in it.

The extent of foreclosure problem in the Eastern Panhandle shows up in ads in area newspapers, one respondent said explaining that there are multiple pages of legal ads for foreclosures compared to "a half-page of ads for jobs."

Sara Bird, a lawyer for Mountain State Justice, said predator loans have grown more prevalent in the last decade.

"There are some real horror stories," she said. Many homeowners did everything right, did all they were told to do by their lenders and still got foreclosure notices.

Companies who service mortgages have no interest in preventing foreclosures because foreclosures greatly increase the fees they can earn, another speaker said.

Late payments carry exhorbitant fees.

"Their payoff comes in bankruptcy," Rockefeller said.

He also warned against homeowners going to bogus companies who offer to keep them from foreclosure. "Don't pay one dime to anyone who says they can help you," he said.

Jackie Groff, housing director for the Consumer Credit Counseling Service of North Central West Virginia, pointed to another problem in mortgage applications -- considering an applicant's gross income rather than their net income.

"They are often very far apart," she said. "Mortgages should be figured on what they actually earn."

The group concurred on one suggestion -- that all mortgage applicants should get pre-purchase counseling before applying for a loan.

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