Agencies gear up to save people's homes

Local nonprofits and government agencies are organizing efforts to deal with the wave of foreclosures sweeping over South Florida, in an effort to keep borrowers in their homes.

Hers is a typical foreclosure story: Eddie Walton, a 44-year-old mother of four, fell ill earlier this year and had to leave her job as a Publix cake decorator. She immediately fell behind the climbing payments on her adjustable-rate mortgage, and, soon after, was in foreclosure.

Then a counselor at the Broward County Housing Authority helped Walton get a grant to pay up the past-due amount and arrange for her lender to change the loan to one she could afford.

Amid South Florida's alarming rise in foreclosures, the new mission of local agencies and nonprofits like the Broward housing agency has suddenly turned from providing affordable housing and down payment assistance to helping prevent homelessness among desperate borrowers facing foreclosure.

Groups are fanning out across the area to inform consumers about ways to avoid losing their homes. The Federal Reserve Bank of Atlanta's Miami branch hosted a meeting with lenders and counselors Thursday to launch a task force in Miami-Dade County to link homeowners with resources.

Help is available from lenders. They are modifying terms of loans and placing borrowers in repayment plans. The problem: walking daunted borrowers through the often complex and time-consuming process.

An industry report released Thursday said lenders had fashioned repayment or loan-modification plans for 19,786 of the 44,150 Florida borrowers whose homes went into foreclosures in the third quarter of last year.

Most of those were repayment plans in which lenders add the delinquent amount to the principal of the loan or spread it out over multiple payments.

That's not generally the most effective form of help, housing counselors and consumer advocates say.

Repayment plans serve as temporary fixes because they don't address the underlying problems of affordability and skyrocketing rates on adjustable loans. Among troublesome subprime adjustable-rate mortgages, which accounted for nearly half of new foreclosures in the quarter ending Sept. 30, the Mortgage Bankers Association said lenders modified 840 loans in Florida and worked out repayment plans for 8,339.

Presumably, Walton was one of them. After her recovery, she was able to find a new job decorating cakes at a Broward Wal-Mart Supercenter, allowing her to qualify for repayment assistance and a loan modification that prevented the loss of her home. Her interest rate, which had risen to 9.75 percent and climbing, was nearly halved to 5 percent -- fixed.

''I won't ever have to worry about it moving again for the next 23 years,'' Walton said. ``I feel wonderful; it's wonderful.''

Finding permanent fixes for borrowers is now the priority of organizations like the Miami-based Neighborhood Housing Services, which only two months ago hired three full-time staffers solely to handle foreclosure clients. The group, principally charged with building affordable housing and providing counseling to first-time buyers, co-hosted Thursday's meeting in Miami with the Federal Reserve Bank.

''We made the conscious choice that we are going to do this, and so we started training people last fall,'' said Arden Shank, who leads the organization -- affiliated with a national organization called NeighborWorks America. ``We have the capacity to do it because we're doing both homeownership counseling and lending. A successful foreclosure intervention specialist is going to be somebody that knows both of those.''

Camillus House, which feeds and houses the homeless and the very poor, has also joined the foreclosure prevention effort owing to the recent influx of calls, some from homeowners facing eviction and seeking shelter. The organization had been authorized to offer mortgage assistance money. But two weeks ago, the Miami-Dade County Homeless Trust, a major funding source, asked it to hold off until counselors could be properly trained.

''We were finding people, after getting assistance, were still losing their homes, so we've kind of stopped it for a little while,'' said Michelle Rodriguez, manager of Camillus House's homeless prevention program, ``We didn't have a formula of how much money we could give, so we kind of put a plug in it.''

The Florida Housing Finance Corp. is also negotiating a contract with NeighborWorks, a nonprofit affordable housing group created by Congress, to provide training to organizations across the state.

The state housing authority disbursed more than $161 million to city and county governments last year for down-payment assistance programs and other affordable housing initiatives. Cecka Rose Green, an authority spokeswoman, said those governments were now using some of those funds for foreclosure prevention efforts.

Phyllis Brown, supervisor of housing counseling at BCHA, said throwing money at people is not the solution, and that catching people before they were too far behind is key.

The organization is flooded with 500 foreclosure calls a week and had appointments through March, mostly with borrowers struggling to pay lofty resets, Brown said. While grants -- usually set aside for down payment assistance -- were available, the trick was determining who had a real chance of surviving.

''The money is not the issue,'' Brown said, ``We can't solve all the cases we get. We can't even take on all the calls we have. I'm a supervisor, but I have a caseload.''

Brown and other counselors advise borrowers falling behind to contact their lenders immediately, and save the money they would normally put toward their monthly payment.

As for Walton, she said if she could solve her problem, anyone could.

''You can't just give up and think the problem is going to go away, because while you think it's going away, it's going deeper and deeper,'' Walton said. ``You need to start asking some of these organizations that really are out there helping people.''