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October 2004
16
Plan could help ease number of foreclosures; nonprofit group looks to offer 'bridge loans' to those in need
BY FRANK DELOACHE AND PARIS GOODNIGHT
SALISBURY POST
As North Carolina continues to see an epidemic of home foreclosures, state
officials are preparing to launch a pilot program to help people save their
homes.
And Rowan and Cabarrus counties are good candidates to take part in the Home
Protection Fund and get a portion of $1.75 million in state funds, according
to Rob Schofield, one of the people who lobbied for the new program.
Schofield is policy director of the North Carolina Justice Center, a
Raleigh-based nonprofit agency that advocates on "issues affecting
vulnerable consumers."
Schofield and Alfred Ripley, the Justice Center's attorney, attribute the
record number of foreclosures to plant closings, such as Pillowtex, and some
lenders' unfair lending practices.
"Our state has lost thousands of jobs in recent years," Ripley said in a
press release. "Many other folks are underemployed and barely hanging on.
"When you combine this with the fact that many mortgage lenders continue to
use abusive loan servicing practices like improperly assessed junk fees, you
have a recipe for disaster."
Lou Adkins, the community development coordinator and housing counselor with
the Salisbury Community Development Corp., knows the program can help
people.
After Pillowtex closed at the end of July 2003, Adkins soon heard from many
people who suddenly couldn't pay their bills, didn't have a job and hadn't
yet begun receiving unemployment.
"Many of these people had never fallen behind on their bills their entire
lives, and suddenly they were in danger of losing their homes," she said
recently at a United Way meeting.
Hearing of the need, the Rowan County United Way has provided emergency
funds that Adkins could use to help make payments while she negotiated with
lenders to prevent foreclosure. She also counseled families on budgeting the
bills and money they had.
So far, the Salisbury Community Development Corp. has worked with 200
families, and no family has lost a home to foreclosure. The United Way has
provided about $34,000 -- with every penny going for payments on people's
mortgages.
Louise Mack is working in Cabarrus County on the same problems. Adkins and
Mack hope to get some of the money from the Home Protection Fund.
Schofield said the N.C. initiative is modeled on a Pennsylvania program that
has been operating for 20 years and is now self sustaining. People who get
help with their mortgage eventually pay it back so it can be loaned to
others.
Schofield said the Home Protection Program will provide "bridge loans,"
which will help get people back on their feet, and financial counseling,
like Adkins and Mack now provide in Rowan and Cabarrus.
"Many of our clients have recently lost a job and need time and assistance
to get re-employed before they resume making mortgage payments. This program
could be a real lifesaver for some," Adkins said in the press release.
During the first three quarters of 2004, lenders filed more than 32,000
foreclosure statewide, according to new data from the state Administrative
Office of the Courts.
This puts the state roughly on pace to meet or exceed last year's 44,000
foreclosures. By way of comparison, the state recorded slightly more than
15,000 in 1998.
Ripley, the Justice Center attorney, and other advocates used those
statistics to lobby the state lawmakers to take action.
This summer, the General Assembly allocated $1.75 million for the pilot
program in which the N.C. Housing Finance Agency will make a limited number
of short and long-term loans to workers who face foreclosure after losing
their jobs due to changing economic conditions.
There will also be new funding for foreclosure mitigation services to help
homeowners in trouble.
Schofield said the Home Protection Fund should get started later this year
in a small group of targeted counties. He said the Justice Center lobbied
for much more money and hopes to get more in the future.
Sens. Walter Dalton, Rutherford County; Kay Hagan, Guilford County; and
Linda Garrou, Forsyth County, all co-chairs of the Appropriations Committee,
helped shepherd the program to passage, according to the Justice Center.
"This has been a tremendous problem in my part of the state," Dalton said in
the press release. "We have got to do more to help working families get back
on their feet during these tough times. I'm optimistic that the pilot
program will be a success and that we'll be able to expand it to help even
more families in the near future."
Contact Frank DeLoache at 704-797-4245 or
fdeloache@salisburypost.com.
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