Rescuing Families from Foreclosure

As the sub-prime lending bubble is bursting, millions of adjustable-rate loans to borrowers are continually increasing to higher rates, propelling homeowners to default in their payments and ultimately leading them to the loss of their homes due to foreclosures. This current rise in mortgage interest rates initiated as a dormant problem during the summer of 2005 during a slump in the housing market, and in a very short time it has been the main factor contributing to the housing market's weakness. Such foreseen housing crisis, as identified by the Real Estate Sector, had to be eased. Their solution brought us the now infamous quick fix sub-prime loan, which at this early stage just aimed at renewing buyer’s confidence in such a stagnant market. This new tool encouraged creative lending entities to continue releasing newer and riskier products to working families, offering them the “quick track” to reach the American Dream of becoming a homeowner.

The impact of foreclosures regionally has provoked a surge in anxious homeowners knocking at our doors to seek help on saving their homes. The Resurrection Project, recognizing the importance of a stable home to the morale and psyche of a nuclear family and how it can be a key catalyst in the formation of healthy communities, has been there to help such families in distress. During this crisis, TRP’s Financial Services counselors have proved to be very effective in helping homeowners save their homes through financial education, counseling and in many cases with mediation geared towards renegotiating mortgage terms.

Take for example the case of Sr. Gonzalez, who saw a jump in his mortgage payments from $1,100 monthly to $1,700, a whopping 35% increase. This hard working father accommodated the new rate increase that his loan was subject to, and continued making the mortgage payments while other bills where just simply piling up. After 4 months of making such steep mortgage payments he decided it was time to seek assistance before the possibility of being forced to default on a house payment. Fortunately a TRP client, and friend of Sr. Gonzalez, referred him to our financial services counselors. Once at our doors, a TRP financial counselor helped Sr. Gonzalez understand his situation, his options and also helped him renegotiate his mortgage terms. Relief was achieved, as Sr.Gonzalez saw his mortgage payments returning to $1,100 monthly. With his financial stability secured by the new fixed rate terms negotiated, Sr. Gonzalez and his family can continue enjoying their beloved home.

Fair, safe and affordable housing is at the core of TRP’s mission, thus it is our responsibility to offer relief and solutions to those affected by foreclosures in our community and its surrounding areas. TRP efforts in financial education has proved effective in instructing consumers on what to look for when they are either refinancing or financing the purchase of their homes, and on how to avoid the pitfalls of sub-prime lending activities. During 2007 TRP assisted 89 families through foreclosure counseling fueled by market changes thereby helping them save $17 million in equity. As the bubble continues to burst TRP will continue returning peace of mind to those distressed homeowners and their families, helping them secure their home and their future.