There has been a nationwide slowdown in home foreclosures for the third straight month, but southwest Missouri isn't out of the woods yet, according to the latest data from California-based RealtyTrac.
The real estate firm's October 2009 U.S. Foreclosure Market Report showed 332,292 foreclosures nationwide - down 3 percent from the September - but foreclosures are still up nearly 19 percent from October 2008.
"Three consecutive monthly declines is unprecedented for our report, and on first blush, an indication that the foreclosure tide may be turning," said RealtyTrac CEO James J. Saccacio in a news release. "However, the fundamental forces driving foreclosure activity in this housing downturn - high-risk mortgages, negative equity, and unemployment - continue to loom over any nascent recovery. And despite all the efforts and resources directed at helping homeowners avoid foreclosure, we continue to see foreclosure activity levels that are substantially higher than a year ago in most states."
In Missouri, home foreclosures were up 2.03 percent to 3,218 from September but were down 12.36 percent from October 2008. Greene County posted 219 foreclosures in October, up 0.9 percent from September and down 4.37 percent from October 2008. Springfield foreclosures climbed 11.46 percent to 175 from September to October, up 1.74 percent from October 2008.
Tonya Collister, housing director for Consumer Credit Counseling of Springfield, said their offices have seen "quite a significant decline" in the number of homeowners seeking counseling services for help with foreclosure problems during recent months. Collister said her organization helped 700 homeowners avoid foreclosure in 2008, compared to 450 to date this year.
In contrast, credit card counseling is up significantly, and Collister said Consumer Credit Counseling is scheduling three weeks out to accommodate the demand.
"It could be that people have decided that this is the year they were going to take care of this issue," she added.
Reaching for lifelines
While getting help with credit and mortgage issues can help homeowners keep a roof over their heads, not everyone is willing to ask for help.
"What I have found (is) when people start to have money issues, whether it's losing their job, divorce or medical ... they don't see the long-term picture," said Judy Hadsall, president and CEO of CU Community Credit Union. "They are living day-to-day, and the decision they make today or tomorrow may not be the best decision for them in the long run."
For example, Hadsall said one of her clients is heading into foreclosure after waiting too long to address mortgage problems with the credit union.
"When they started to have issues, if they would have come in and talked to us at the credit union, and let us ... give them different options, they might have been able to save their house," Hadsall said. "Instead, they waited until it was too late, and now they are listening to a bankruptcy attorney who is telling them what he thinks they should do in a bankruptcy situation."
Some people don't talk to their lenders or to groups such as CCCS because they are embarrassed, prideful or simply uncomfortable talking about financial issues, Hadsall added.
Help for underwater homeowners
The federal government has set out to help homeowners who are underwater with their mortgages, meaning that they owe more than the homes are worth.
On Nov. 30, the Obama administration expressed dissatisfaction with the way some lenders are dragging their feet to make permanent changes available through Making Home Affordable, a $75-billion, taxpayer-financed mortgage modification program approved by Congress earlier this year to help struggling homeowners.
As a result, the U.S. Department of the Treasury and Department of Housing and Urban Development announced a nationwide campaign to help participating borrowers convert to permanent modifications under the Obama administration's Making Home Affordable Modification Program. The groups will begin to publicly identify the lenders that are failing to give troubled homeowners permanent loan modifications, and they will monitor the companies' progress daily. The Treasury's list of slow-moving lenders is to be published later this month.
"We now must refocus our efforts on the conversion phase to ensure that borrowers and services know what their responsibilities are in converting trial modifications to permanent ones," said Phyllis Caldwell, the Treasury Department's homeownership preservation chief, in a news release.
The lenders that are identified as failing to help quickly enough will be required to submit schedules demonstrating their plans to reach decisions on each loan for which they have documentation and to communicate either a modification agreement or denial letter to those borrowers. Treasury and Fannie Mae account liaisons are being assigned to these servicers and will follow up daily as necessary to monitor progress against the servicers' plans. Daily progress will be assessed by the end of each business day and reported to the administration.
The modification program already has helped 650,000 borrowers, and roughly 375,000 of the borrowers who have begun trial mortgage modifications since the start of the program are scheduled to convert to permanent modifications by the end of the year.
But as the government keeps an eye on lenders, Hadsall reiterates that homeowners also need to keep up their end of the deal - and ask for help when they need it.
"I don't think the federal government has control over people doing what is right by the creditors," Hadsall said. "They have to be willing to help themselves."[[In-content Ad]]
