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Program to Help Avoid Foreclosure

Program offering guidance to homeowners in trouble is extended through rest of 2011

About two-thirds of HUD-certified housing counselor Dee Rains’ clients have been referred to her by the AARP Foundation’s Foreclosure Prevention Program.

Jason Millstein/Aurora Select

About two-thirds of HUD-certified housing counselor Dee Rains’ clients have been referred to her by the AARP Foundation’s Foreclosure Prevention Program.

Dee Rains keeps a bulletin board above her desk covered with thank-you notes from the Arizonans whose homes she has helped to save.

See also: Reverse mortgages: an alternative to foreclosure.

The happy missives keep Rains, a HUD-certified counselor for the nonprofit Administration of Resources and Choices in Phoenix, from getting emotionally drained by the more numerous unhappy endings. Of the many homeowners she helps try to arrange lower loan payments, about one in four succeed.

The moral support she provides is just as critical as her experience. "For most people, it is just knowing that they aren't in the process all by themselves," she said.

About two-thirds of her clients are referred from the AARP Foundation's federally funded Foreclosure Prevention Program, which operates in Arizona and Nevada. Now in its second year, the program refers financially strapped older homeowners to HUD-certified counselors who can help them renegotiate loan payments and stay in their homes.

Since 2010, the program has provided information and referrals to 50,000 older homeowners in Arizona and Nevada, said Robin Bowman, AARP Foundation program specialist. Nevada leads the nation in foreclosures, followed by Arizona, according to RealtyTrac. In April, one in every 205 Arizona properties had a foreclosure filing.

A bulletin board behind Dee Rains' desk is covered with thank you notes and drawings of appreciation from clients she has helped with their mortgage concerns.

Jason Millstein/Aurora Select

A bulletin board behind Dee Rains' desk is covered with thank you notes.

One of the notes above Rains' desk is from Peggy Schmidt of Gilbert, whose 7-year-old adopted son will not have to leave the only real home he has ever known, thanks to Rains. Schmidt is a single, 63-year-old senior executive assistant to a dean at Arizona State University. She got behind on her mortgage when state budget cuts forced her to take 12 days of unpaid furlough.

For more than a year, she tried to get her home loan payment reduced. "Every time I'd call, I'd get a different person," she said.

Finally, she was informed that she made too much money for one home modification program. After reading about the foreclosure prevention program in an article in the AARP Bulletin, Schmidt contacted Rains, who revised the application. Eventually, Schmidt's payment was reduced by $282 a month — enough to make it feasible.

Another note on Rains' bulletin board is from Robert and Debra Hesler, of Phoenix, a couple in their mid-50s. Both have medical problems that prevent them from working, and they live on less than $1,000 a month. Rains helped them avoid foreclosure on the home they've lived in since 1992 by getting their payments cut by more than half, from $772 to $346.

"If you really want to stay in your home, fight for it," Debra said. The couple recommends getting help.

"Without Dee's help, it wouldn't have happened," Robert said. "We needed an advocate."

Next: AARP Arizona conducts tele-town halls. >>

To get the program started last year, volunteers cold-called older Arizonans in high-foreclosure areas and asked whether they needed financial guidance. By year's end, the program had contacted at least 40,000 older residents in areas hardest hit by foreclosures.

In February and May, AARP Arizona conducted tele-town halls for homeowners to ask questions of Rains and other HUD-certified housing counselors.

A survey of more than 4,000 participants at February's tele-town hall meeting found that 8 percent of callers were behind on their mortgages and only 4 percent had spoken with a HUD counselor. Yet a third of the callers said they had been a victim, or knew someone who had been a victim, of a mortgage refinance scam.

"We have to be the trusted resource and reach out to them," said Vivian Vasallo, vice president for housing for the AARP Foundation. She noted one of the program's goals is to help warn homeowners about con artists posing as housing counselors and demanding fees.

The saddest stories for Rains are clients who are worse off than they were a year ago because they paid thousands of dollars to so-called housing counselors or companies claiming they could save their houses. "We always tell them up front, that if someone is charging you for this [foreclosure prevention] service, it is a scam," she said.

Even though the program centers on housing, older people are referred to other social service resources if they need other assistance, Vasallo said. Older people often have housing problems because of unemployment. "When people 50-plus lose their jobs, they tend to stay unemployed for a longer period of time. You might have budgeted for six months of unemployment, but it's longer for older people. And now food and fuel prices are going up."

The AARP Foundation's Foreclosure Prevention Program can be reached at 1-800-635-1402.

Maureen West is a Phoenix writer.