By Denise Richardson
Staff Writer
April 05, 2008 04:00 am As the number of distressed homeowners rises nationally, foreclosure filings are up in Otsego County and high in Delaware County, local clerks said this week. And homeowners could be further challenged in months ahead as lenders adjust mortgage rates. Meanwhile, rising food and fuel costs are straining budgets. While politicians and federal officials are working on measures to help troubled homeowners and address subprime and predatory lending practices, some industry officials said at-risk borrowers should review their budgets and seek help sooner rather than later if they cannot make a mortgage payment. The pace of foreclosures being filed in state Supreme Court in Otsego County is rising, court officials said this week. This year, 31 cases have been filed in the first quarter, as opposed to 103 all of last year and 96 in 2006, they said. Many cases this and last year in Otsego County were filed by such national lenders as Chase Home Finance, Wells Fargo Bank, Citimortgage, Green Tree Credit, GMAC, HSBC and U.S. Bank. In Delaware County, foreclosure notices are ``very high,'' a county clerk said recently, but figures weren't immediately available. The Daily Star called two area residents whose properties were listed in foreclosure notices in the paper's classifieds section. Neither wished to comment, and one said it was no one else's business. ``People are hurting nowadays,'' said Donald Schwartz, of Schwartz Law Office at 89 Main St. in Oneonta. With rising food and fuel costs, a household with two working adults might not have enough to pay the mortgage, keep the house warm and put food on the table, he said. And some businesses are closing or laying off employees. Since the mortgage industry was deregulated, large companies file suit after one to three missed payments, Schwartz said, and some mortgages with adjustable rates also have hidden fees. Borrowers have rights, he said, and should seek help as soon as they see a problem. ``There are a lot of different remedies,'' he said. Schwartz said he had about 35 foreclosure-related cases last year; the number has been increasing but not as much as he expected, he said. A national trend with many causes The increase in foreclosures has been seen across New York state and the nation, said Philip Lentz, director of communications for the State of New York Mortgage Association, which helps low- and moderate-income families become homeowners. Though each foreclosure case is the result of different circumstances, he said, some causes include signing on to an adjustable-rate mortgage without being able to afford it and jumps in adjustable-rate mortgages. Many adjustable-rate mortgages were approved between 2005 and 2007, Lentz said, and the holders will see the rates reset in the next 12 to 18 months. Refinancing is easier when mortgage holders aren't behind on payments, Lentz said, and a decrease in home values also has made refinancing difficult. The turmoil in the housing market has affected older homeowners who refinanced, perhaps after an illness, as well as younger homeowners with their first mortgage, officials said. The Federal Reserve Bank this week launched a map on its website _ www2.newyorkfed.org/mortgagemaps/ _ that provides monthly information about nonprime mortgage conditions across the nation. The data can be used to identify foreclosure hotspots, which may assist community groups and others to direct financial counseling and other resources to at-risk homeowners. The Fed map reported that for New York in December, subprime mortgages represented 18.5 loans per 1,000 housing units and two of them, or 11.3 percent, were in foreclosure; 51 percent were adjustable-rate mortgages, with 36.6 percent of those ARMs to resettle in 12 months; and the share of late payments in the last year was 46.7 percent. Local bank reports few delinquencies The crisis in the subprime credit market underscores the role of local lending institutions, which work diligently with homeowners to keep their mortgages, said John Nader, Oneonta mayor and dean of liberal arts and sciences at the State University College of Technology at Delhi. Of the 1,100 to 1,200 residential mortgages held by Wilber National Bank in Oneonta, one is in foreclosure, said Douglas Gulotty, president and chief executive officer. The bank doesn't hold any subprime or other exotic mortgages, he said, and therefore hasn't seen the level of delinquencies reported nationally. About a dozen mortgage holders are 15 to 30 days late with payments, he said; at that point, a bank official will call to inquire about the tardiness and see if help is needed. Problems arise more often with car payments than with mortgages, Gulotty said; this year, families have higher household budgets, and more people are using tax refunds to pay bills. ``I am worried that they are struggling more,'' he said. Patrick O'Rourke, a housing counselor with Quaranta Housing Services Center, part of Opportunities for Chenango in Norwich, said too often someone in financial trouble doesn't make his mortgage a priority and ignores mail about delinquencies, thinking the problem will go away. However, after one payment is missed, some lenders won't accept further payments, he said, and the situation escalates. O'Rourke said he refers clients to a national hot line, where an assessment determines if it's feasible to stay in the mortgage. Banks that know a mortgage holder is employed and solvent may be willing to work out a solution, he said. O'Rourke, who is helping about five families, reported anecdotally that he has seen more foreclosure cases, but it's a result of more people reaching out for help. The Federal Housing Administration and negative publicity have pressured banks into efforts to work with borrowers, who should seek help, he said. When someone arrives in a shiny new truck to discuss missed mortgage payments, O'Rourke said, he asks if that person wants to live in his or her vehicle. O'Rourke added that he repeats an adage he heard many years ago: ``Even if you have to eat dirt, make your mortgage payment.'' FORECLOSURE TIMELINE A home mortgage is a secured debt, and if is isn't paid according to specifics in the agreement, a lender can take the house. The New York State Banking Department said a borrower must keep up on mortgage payments and communicate with the lender if financial problems develop. The department said a typical time line of a foreclosure is: ä Day 1: Missed payment. ä Day 16-30: A late charge is assessed, and the mortgage servicer who processes payments will try to contact you. ä Day 45-60: The service will send a letter noting the breach of terms, and you have 30 days to pay the delinquent amount. ä Day 90-105: The service refers the loan to its foreclosure department. A legal representative may file a notice at a courthouse, publish details of the debt in a local newspaper and attend hearings on the case. ä Day 150-415: Your house is sold at a court-ordered sale or auction. For help and referrals to resources, call the state Banking Department at (877) BANK-NYS or visit www.banking.state.ny.us. Also, HOPE NOW is an alliance between counselors, servicers, investors, and other mortgage market participants to maximize outreach efforts to at-risk homeowners and help them stay in their homes. Call the hot line at (888) 995-HOPE or visit www.hopenow.com.
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