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Arizona

Pilot Program Offers Free Guidance to Avoid Foreclosure

AARP volunteers are calling older homeowners in ZIP codes with high foreclosure rates

Ben Santoro

After medical bills began to pile up, Ben Santoro of Phoenix got behind on his mortgage payments. Starting this month, the AARP Foundation is helping homeowners like Santoro learn how to avoid foreclosure through a federally backed pilot project. — Jason Millstein/Aurora Select

Summary:

  • Phoenix and Las Vegas have been selected for a federally backed foreclosure prevention program.
  • AARP volunteers are calling homeowners in ZIP codes with high foreclosure rates offering guidance on sources of information and contacts with HUD-certified housing counselors.
  • Sixty percent of delinquent homeowners don't seek help in order to avert foreclosure.

 

Ben Santoro has spent the better part of a year fighting to save his home from foreclosure.

Santoro, a 63-year-old former FBI employee, and his wife downsized from a large home in Maryland to a 1,700-square-foot home in Phoenix four years ago. They were in good financial shape as they headed into retirement.

In 2008, after medical bills for his wife's cancer, they fell behind on their $2,300 mortgage payments. Selling wasn't an option: Since home values had plummeted, they owed more than the home's current market value.

Several times he thought he had reached a deal with his bankers. Each time, however, a new problem would arise. "Different people and companies are involved and aren't talking with each other. They use ridiculous stalling tactics," he said. He doesn't recommend going it alone. He is still fighting and said he will not give up.
   
The AARP Foundation is helping homeowners like the Santoros through a federally backed pilot project, the Foreclosure Prevention Program, starting this month and continuing through the year. Some 40,000 older homeowners living in high foreclosure areas of Phoenix and Las Vegas will receive calls from AARP volunteers asking whether they need financial guidance. Callers will offer information on resources, connecting those who fear foreclosure to HUD-certified housing counselors.

"Sixty percent of seriously delinquent homeowners-people behind on their mortgages two months or more-are not reaching out for any help to save their homes," said Julia Stephens, vice president of the AARP Foundation. "While it may be the best thing for a person to go into foreclosure—we don't make any judgment on that—we do tell them you need professional help to make an informed decision."

Other goals of the program are to offer help finding a job and warn about the flood of scam artists posing as housing counselors who are charging excessive fees.

Kay White, who runs the nonprofit Administration of Resources and Choices, said there is no reason to pay for foreclosure prevention counseling when you can get it free from HUD-certified programs like hers, located at the Area Agency on Aging office in Phoenix.
   
"We have seen people who paid $300 to $5,000 to companies claiming they would save their houses, but they didn't," White said. "People end up borrowing money from family and friends to pay for those scam services and then are worse off."

Foreclosure hurts older adults disproportionately because they have less time and ability to recover financially. Research by AARP Public Policy Institute in 2007, at the start of the foreclosure crisis, found 28 percent of homeowners 50 and older were already in mortgage trouble.
   

Phoenix and Las Vegas were targeted for the project because they have been hit hardest: Nevada leads the nation in foreclosures, followed by Arizona, according to RealtyTrac. During the first quarter, one of every 49 Arizona houses and one of every 33 Nevada homes received a foreclosure filing. Nationally, it was one of 138. In addition, 51 percent of Arizona homeowners and 70 percent of Nevadans owe more than their homes are worth, compared with 24 percent nationally, according to First American CoreLogic, a real estate information company.

AARP tested the foreclosure prevention project this spring in Las Vegas, with 10 percent of the first 3,000 people called being connected to help, said Scott Adkins, an AARP Foundation senior manager. Volunteer callers include retired attorneys and accountants.

 "We are reaching people who find themselves on the financial ropes for the first time, and who don't have any idea where to turn for assistance," Adkins said. Teresa Tourek, manager of housing counseling for Take Charge America, a HUD-certified service in Phoenix, said the sooner help is sought the better, but warns that the process can take 10 months or longer.

"If we can start working with people who are current on their mortgage but just having financial problems, it allows us to work with them on all the options, including refinancing or loan modification," she said.

The housing counselor's job is to be an advocate. "People don't always understand how far they can push on a lender. We do that a lot," she said.

The AARP Foundation's Foreclosure Prevention Program can be reached at 1-800-635-1402.
   
Maureen West is a Phoenix-based writer.

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