SALT LAKE CITY — Utahns who modify their mortgages to save their homes — only to have it result in unexpected foreclosure — have a place to turn for help.
Dozens of Utah homeowners are facing foreclosure after they tried to navigate a complex world of rules and recommendations connected to the government's $75 billion "Making Home Affordable" program.
After reporting on the problem Wednesday, KSL-TV heard from many more Utahns in the same predicament and discovered the best avenue for help is to dial 211, where homeowners will be directed to a housing counselor in their region of the state.
"This is a hard process," said Tara Rollins, executive director of the Utah Housing Coalition. "You really need to have a third party working through the process with you."
Foreclosure intervention counselors who handle the calls on the front lines of the crisis see the problem intensifying.
"We have not even been able to get our arms around the issue," Rollins said.
The number of calls they field on the hotline continues to increase.
"I don't think we've hit our peak, personally," said Kristen Johnson, director of housing with Cornerstone Financial Education.
A year ago, $1.8 million in federal stimulus funding enabled the state to create 19 counselor positions across the state. The Utah Housing Coalition distributed that money among a number of nonprofit community programs statewide to facilitate the program.
In one year, the program saved 717 households from foreclosure. Saving households also translates into an economic benefit for the community.
According to Congress' Joint Economic Committee, the average foreclosure costs $77,935, while preventing foreclosure averages $3,300. Using those averages, the Utah Housing Coalition figures Utah's foreclosure intervention counselors saved approximately $55.8 million.
"The counselor is going to listen to your particular story," Rollins said. "They're going to give you different options, then you need to decide what is best for you."
Some 17,358 Utahns lost their homes to foreclosure since April 2009, and some 3,700 have been foreclosed in the last quarter alone.
A sampling of e-mails received by KSL illustrates the heartbreaking situations many homeowners face when trying to modify their mortgages:
"I did exactly what the bank said," writes Cary. "Right before the 6-month trial modification was up I got a letter from a different division of the bank saying I did not qualify. … Now I live in my brother's basement."
Holly writes: "I think this story is bigger than you think, my husband and I are going through the same thing."
Melanie writes: "It's nice to know we're not alone."
From Cori: "It happened to us as well. We lost EVERYTHING."
From Sylvia: "As I watched the News tonight I saw MY story unfold."
KSL reported the stories of several homeowners who followed the directions of their lenders to modify their mortgage to more affordable payments, then found those directions actually hastened the foreclosure of their home.
Johnson said education is the best tool that Utah homeowners have to negotiate their specific problems, and the help is free. If the counselor believes you need to retain an attorney, they'll tell you.
"We're not paid a commission off of that," Johnson said. "So, our intention is nothing more than to educate them on their options and help them evaluate the pros and cons of any of those options."
Not every homeowner in crisis will like the most sensible option. Many will still lose their homes, but these counselors can help with that difficult choice. Johnson advises: be proactive, go through your own budget and cut what you can in all of your expenses. That will help with the entire process.
The funding for the counselors will run out in June.
e-mail: jboal@desnews.com