Rob Young, a self-employed building contractor, has lost a great deal in the past few years, but thanks to the Obama administration’s mortgage modification plan, he hasn’t lost his home.
Young’s was one of 331 households turning to Spokane nonprofit SNAP for foreclosure counseling in the first three months of this year, up 25 percent from the same period last year.
In Kootenai County, the Community Action Partnership also has been flooded with calls for foreclosure counseling, said housing director Barbara Leachman. The wait for appointments is two to three weeks, she added.
“The sheer volume is crazy. I’ve never seen anything like it before,” said Peggy Burrell, housing counseling program coordinator for SNAP.
Last month, 216 homes were foreclosed on in Kootenai County and 107 homes in Spokane County, according to RealtyTrac, an online foreclosure report.
Burrell said the reasons for foreclosure are diverse – unrealistic loans, the housing market collapse, unemployment, health problems.
“Their situations are out of control,” Burrell said of the people who see her and her staff.
SNAP executive director Larry Stuckart said his agency can’t resolve every foreclosure issue with which it is confronted, “but our staff has done an excellent job of saving many homes from foreclosure in Spokane County.”
Young’s home is one that has been saved.
The 63-year-old builder was diagnosed with lung cancer about the same time the U.S. economy entered a recession. The result, Young said, was “a financial train wreck.”
Unable to work while on radiation and chemotherapy, he could only watch as the housing market collapsed. Most of the dozen rental homes he had financed and built were or are being foreclosed on.
Many of his renters, who also were affected by the downturn, packed up and left, owing Young thousands of dollars.
With his cancer in remission, Young has returned to work part time, but still could not make the nearly $1,500 monthly payment on his north Spokane home.
Though he has lived in the home he built himself for 27 years, he has had to refinance it several times.
“Being a builder, you’re always having to leverage something,” Young said.
Recently, a SNAP counselor determined that Young qualified for the federal Making Home Affordable Modification Program, which could help up to 4 million Americans avoid foreclosure by reducing monthly mortgage payments.
Nationwide about 7 million households are behind on mortgage payments.
The program can lower interest rates to as low as 2 percent for five years and gradually increases the interest paid until it reaches a cap, which is equal to today’s current market rate.
The modification can extend the term of a mortgage to 40 years and forebear a portion of the principal mortgage balance in order to achieve a payment equal to 31 percent of the borrower’s monthly household income.
Loans on principal residences only must have originated on or before Jan. 1, 2009, with a principal balance up to $729,750.
Critics of the program say that many borrowers receiving five-year modifications under the plan eventually fall behind on payments anyway.
Young worked with his bank to lower his payment to a more manageable $900 a month.
“I was precarious at best,” Young said of his financial situation when he turned to modification. “I needed something to hang on.” He said his SNAP counselor “made it happen.”