The foreclosure crisis that hit cities like Lowell hard, peaking in 2008, is far from over. Not only homeowners who entered into bad loans, but those who have suffered job loss, illness or divorce in recent years are finding themselves on the brink of losing their homes.
“This is a continuing crisis; there is a tendency to sweep this under the rug, but it is a continuing problem,” said Middlesex North Register of Deeds Richard Howe Jr. at a roundtable discussion held by Attorney General Martha Coakley Wednesday afternoon in the Mayor’s Reception Room at City Hall.
It has been one year since the national settlement with the nation’s largest lenders that netted Massachusetts $44.5 million to use to establish programs to assist homeowners facing foreclosure with loan modifications and related services.
“We have seen a blizzard of forfeitures,” said Coakley. “Much of this didn’t need to happen; this was a person-made disaster.”
Coakley said since launching the HomeCorps program in April 2012, her office has fielded more than 15,000 calls and has been successful in getting more than 1,100 mortgages permanently modified, making it possible for families to stay in their homes.
Locally, the Coalition for a Better Acre’s Home Preservation Office has assisted 1750 homeowners since 2006 and the AG’s HomeCorps Program has a satellite office at Lowell City Hall.
On Wednesday, Coakley was in Lowell to hear more about the impact of the crisis from those on the front lines, city and social service agency officials who deal with foreclosures and their consequences every day.
She got an earful.
“There is a huge need for housing counseling,” said Community Teamwork Inc Executive Director Karen Frederick. “Our counselors are busy all day, every day.”
All of the participants agreed there is a need to deal with the consequences of the foreclosure crisis including: an increased demand for mental health services to assist those going through the foreclosure process with stress; a need for assistance with relocation of displaced families; a need to hold the lenders to the standards to which they agreed as part of the settlement and to shut down scam artists promising to assist homeowners out of foreclosure. Going forward, there is a great need for financial literacy education, as a proactive way to prevent a recurrence of what has been seen in the last five years.
Marisa Melendez of the Greater Lawrence Community Action Council told of one woman who was so upset and stressed by the foreclosure process that she ripped up every single piece of paper related to it “because she didn’t want any remnant if that foreclosure process going with her to her new home she is now renting.”
Leonard Raymond, executive director of Homeowner Options for Massachusetts Elders, said his job is complicated because seniors often wait a long time before seeking help, making the process of assisting them more complicated and expensive. His clientele are also those most likely to be targeted and victimized by scams.
City Manager Bernie Lynch and Mayor Patrick Murphy said although the crisis did hit the city hard, destabilizing neighborhoods and families, it could have been worse.
“The city has been proactive in minimizing the impact,” said Murphy.
Lynch spoke of the city’s vacant and foreclosed property ordinance, which requires banks that own foreclosed upon properties to register and maintain them or face steep fines. The city also instituted a receivership program wherein a receiver in conjunction with the city takes control of a vacant property, rehabilitates it and sells it to a family that can afford the mortgage.
Assistant City Manager Adam Baacke said what strikes him is, although low and moderate income families were those predominantly impacted by the foreclosure crisis, those who completed pre-sale counseling in a program like the Merrimack Valley Housing Partnership’s First Time Homebuyers Program remained above the fray.
Baacke added the city has awarded 700 down payment assistance grants to first time homebuyers who went through the program and have only seen two foreclosures.
“That is how we prevent the next crisis,” he said.
The Attorney General’s AG HomeCorps is available Monday through Friday from 10 a.m. to 4 p.m. at 617-573-5333. You may also file a request for assistance at www.mass.gov/ago/homecorps.
Consumers who feel they have been targeted or victimized by a foreclosure prevention scam can file a complaint with the AG’s Public Inquiry and Assistance Center at 617-727-8400.