Program held on foreclosure prevention

The Ocean County Board of REALTORS ® and the Monmouth County Association of REALTORS® presented a Foreclosure Prevention Program to its members and related professionals.

The event was held in the Mancini Room of the Ocean County Library on Washington Street in Toms River. Representatives from Chase, the New Jersey Home Mortgage Finance Agency, and OceanFirst were the featured speakers. "Too many people are losing their homes unnecessarily," says Jeff Gamble, President of the Ocean County Board of REALTORS®.

According to Industry leaders, millions of American households are at risk of losing their homes over the next three years. Experts claim that the next round of potential foreclosures is larger than the most recent mortgage debacle. Industry professionals must be prepared to meet this crisis so the negative effects are minimized for homeowners.

Realtors are frequently the first professionals to learn that a homeowner is at risk. The sooner the client gets the help they need, the better the chance that they can save their home. And if there is no hope of saving their home, the negative effects of losing their home can be minimized if the correct action is taken quickly. According to Gamble the purpose of this conference was to get industry professionalsworking together by understanding the issues faced by the homeowner, the lender, the realtor and government agencies.

Ed Collins, representing the New Jersey Home Mortgage Finance Agency laid out the details of the Mortgage Affordability Program (MAP). Homeowners who have met with a financial setback can qualify for a zero percent loan of up to $20,000. MAP proceeds may be used to pay off other debts in order to make their home payments affordable.

Or a homeowner may use the funds to catch up on back payments created by a temporary financial hardship. According to Collins, homeowners can access help free of charge by calling any of the scores of counseling centers throughout New Jersey. Call the Ocean County Board of REALTORS® office at 732-244-8111 for a list of shore area centers.

The problems that face lenders are many. Pamela Anderson is the Manager of the Chase Home Ownership Centers for New Jersey. "Since President Obama's Making Home Affordable Program (MHA Program) was implemented in March, Chase has taken a proactive approach towards reaching out to homeowners at risk of losing their home," said Anderson. Prior to the MHA Program, the very high percentage of loan modifications re-defaulted, according to Anderson.

The MHA's Loan Modification Program enables lenders and borrowers to re-work an existing loan so that the homeowner can stay in their home with a payment they can afford. Anderson says that Chase (who also assumed responsibility for all loans made by Washington Mutual and EMC) has modified more than 130,000 loans.

Anderson added that under the Making Home Affordable Loan Modification Program, there are absolutely no fees involved. "There are plenty of scams that entice homeownerswith promises of saving their home for a fee. People can access www.makinghomeaffordable. gov for free," added Anderson.

To qualify for the Making Home Affordable Loan Modification Program, a borrower must meet five criteria. The mortgage must be FNMA or Freddie Mac loan for a principal residence, must have been originated before Jan. 1, 2009, and be for less than $729,750. Additionally, the borrower's monthly principal, interest, taxes, insurance and association fees must be more than 31 percent of the gross monthly income. The homeowners must provide an explanation of the hardship that caused their financial dilemma. The MHA site allows anyone to answer a few questions to see if their loan qualifies.

If a homeowner's mortgage is not a FannieMae or Freddie Mac backed loan, there is still hope for an at-risk borrower, according to Kathy Ramos of OceanFirst and a Loss Mitigation Specialist for 30 years. "Most portfolio loan (non-FNMA and non-Freddie loans) investors encourage loan modifications along very similar guidelines to the MHA Program," said Ramos.

The rapid growth in the number of homeowners facing foreclosure has created a backlog of people seeking help. According to Ramos lenders and loan servicing companies are beginning develop staffs capable of handling the number of people who seek help. Her department has been able to complete some modifications in a matter of four weeks, while the industry norm tends to be closer to four months.

"People at risk need to seek help sooner rather than later. They should not wait until their savings are depleted or they are three months late." Ramos says people should contact their lender as soon as they see a problem on the horizon. According to Ramos, the sooner people act, the quicker and the easier and the less painful the solution.

If a loan modification won't solve the problem, the homeowner will have to sell the home or lose it, according to both Ramos and Anderson. By selling the home before foreclosure, the homeowner paves the way to purchase another home sooner. Even if the borrower owes more money than the home is worth, lenders are eager to work with the homeowner to avoid foreclosure.

According to Gamble, by minimizing the number of at-risk homeowners, we help everyone. "The market doesn't need more homes for sale. We do everyone a service by helping families keep their homes. If fewer distressed properties come on the market, home values in the community are sustained, lenders minimize losses due to defaults, real estate markets will recover quicker, and most importantly, more American families enjoy the security and enhanced lifestyle that comes with homeownership."