Philadelphia Program Clips Foreclosure Listings

Distressed homeowners are saving their homes from being added to Philadelphia foreclosure listings through the help of the city’s foreclosure prevention program and the assistance of the Association of Community Organizations for Reform Now, which is based in Washington, D.C.

ACORN said that over 78 percent of homeowners who have participated in the city’s program last June 2008 were able to keep themselves away from foreclosure homes listings. Because of the relatively high success rate of the program, ACORN has been promoting Philadelphia’s program nationwide.

Deserie Jones-Wright, a 47-year-old Navy veteran and former police officer in Philadelphia, was able to keep the home she has owned for 11 years from foreclosure listings because she sought help from the city’s program. When her loan rate suddenly increased from 5.5 percent to 7.7 percent, her monthly payment of $975 took 50 percent from her monthly disability check.

With the help of the city and ACORN, her mortgage bank Everhome Mortgage Co. negotiated with her and later agreed to lower her monthly payment to $572 by reducing her loan rate to 5 percent.

Jones-Wright said she has just sent her first new payment and she is thankful and relieved she is not going to lose her house to foreclosure listings.

ACORN said the innovative Philadelphia program is effective because it is mandatory, it uses a community outreach scheme which is spread door-to-door and it leverages the knowledge and skills of HUD-certified housing counselors.

Jones-Wright was able to keep her home from foreclosure listings because somebody reached her through the program’s door-to-door scheme.

The program also provides free legal counseling to troubled homeowners who have become delinquent but are not yet in foreclosure. These homeowners later attend a court session where they reach payment agreements with their mortgage lenders.

Farah Jimenez, head of the Philadelphia-based community development enterprise Mount Airy USA, said that under the city program, homeowners and their counselors talk and find ways to arrange loan payments that prevent them from losing their houses to foreclosure listings and at the same time reduce the losses of mortgage banks and their investors.

President Obama’s foreclosure prevention program, dubbed Making Homes Affordable, is aimed at helping up to 9 million homeowners save their houses from foreclosure listings. While the program provides cash incentives to both borrowers and mortgage lenders to modify loans, the program is not mandatory.

Rick Sharga, senior economist of foreclosure tracking firm RealtyTrac, said Philadelphia’s mandatory strategy is worth trying.

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