Central Valley

Valley homeowners get help

Hundreds of people call the No Homeowner Left Behind hotline each month and speak to one of 20 counselors trained to help families facing foreclosure.

The goal is to save a family's house or, barring that, preserve what equity is available or steer households to other resources. The program, a grass-roots effort based in Fresno -- and an increasing number of others like it -- could possibly help thousands more families in the central San Joaquin Valley facing similar situations, experts say.

It just takes a phone call.

"We want to help with a strategy to minimize effects on credit, the family and community in general," said Jeff Schrager, who helped found the program. "It's hard to find resources on your own."

Medical issues rather than a subprime loan caused Gloria Brown's mortgage crisis, but the resources available still came to her rescue.

Brown's workers' compensation insurance benefits expired after two knee surgeries, severely restricting her income. Her mortgage company was threatening foreclosure when Brown, a single mother of five children in Madera, learned of the nonprofit No Homeowner Left Behind program.

Program counselors worked on her behalf, contacting her lender, a legislator and others. An advance from her employer helped buy some time and today Brown is making extra payments with the goal of becoming current on her loan and then refinancing.'

"They helped me," Brown said of the No Homeowner Left Behind program. "They are available to help others."

Schrager and Martha Lucey, president and chief executive of nonprofit ByDesign Financial Solutions in Fresno, said lenders are becoming more responsive to families that seek help, if only because they are becoming deluged with properties they need to sell.

"Lenders have increased staffing on the front end so it's easier than it was to get hold of a live person," Lucey said. "We're seeing more flexibility than we have in the past."

In addition, more resources are coming available, from grass-roots organizations like No Homeowner Left Behind to programs by government programs and even lenders themselves.

But, Lucey said, homeowners should get help as soon as they sense trouble.

"We're seeing them later in the game than we would like," she said. "Too often we're seeing them 60 or 90 days delinquent, and it is more difficult to come up with a solution."

Bank of America announced a two-year effort that will provide $35 million to nonprofit agencies, including Lucey's ByDesign Financial Solutions.

Eighteen agencies in California will receive $1.5 million and three groups in Fresno County -- ByDesign, Self Help Enterprises of Visalia and Fresno County Housing Resource Council at Manchester Center -- will get $155,000, said Rudy Medina, the bank's market president in Fresno and Madera.

Lucey said her agency received $85,000 from Bank of America. The agency will devote $60,000 to help at-risk homeowners in Fresno, Merced, Modesto and Stockton, and $25,000 to reach out to the Hmong community.

In a broader move, Bank of America also announced plans to refinance or modify $40 billion worth of loans after if its proposed acquisition of Countrywide Financial Corp., one of the nation's largest mortgage lenders.

Bank of America will continue its policy of permitting tenants to continue living in properties subject to foreclosure for 60 days after the completion of foreclosure proceedings. If the tenant voluntarily leaves the property within 30 days of the completion of foreclosure proceedings, he or she will receive a $2,000 payment to help pay for moving expenses.

Countrywide was a major lender of subprime loans and has battled a surge in defaults and foreclosures.

Bank of America is acquiring Countrywide even though BofA stopped making subprime loans in 2001 and has one of the lowest default rates among lenders.

Both Bank of America and Countrywide are founding members of HOPE NOW, an alliance between counselors, mortgage market participants and mortgage servicers to create a unified, coordinated plan to reach and help as many homeowners as possible.

Bank officials say that from July 2007 through February 2008, HOPE NOW has helped do loan workouts for almost 1.3 million individuals to retain their homes.

Medina said Bank of America will help customers of other banks that want to refinance their adjustable rate loans. Another option comes from the Department of Housing and Urban Development, which is recasting its FHA loan program.

The Federal Housing Administration has offered these loans all along, but the advent of subprime loans that had more relaxed restrictions combined with climbing home prices rendered them almost obsolete.

Guess what?

They're back, and they could be perfect for a first-time home buyer or someone looking to refinance a loan with a variable rate.

HUD works with approved lenders at ByDesign Financial Services, ACORN Housing in Fresno, the Fresno Housing Authority, Self-Help Enterprises and CSET in Visalia.