Do you know someone who is faced with the possibility of losing their home?  Most of us know someone who has or will face this tragedy.  Being faced with foreclosure is an emotional issue; often times, the homeowner is in denial that the bank will actually take their home.  Currently, 31% of the houses that are either currently on the market or have sold within the last twelve months in Clay County are foreclosures.  I’m sure that many of those homeowners were in denial too.

Since some homeowners are in denial or embarrassed about their situation, many avoid phone calls and don’t open letters from their lender.  Avoiding the problem is not a solution!  Communication with the bank is very important.  Keeping the house occupied is also important.  Due to the increased liability of a vacant home and a clause in the loan documents, the bank is able to take possession of a vacant home more quickly than if it is occupied.

There is a process that the bank goes through when a borrower is in default (behind on their payments).  The process was outlined at the time that the borrower received the loan.  It’s hard to remember everything from the many documents signed at “closing”.  Delinquent borrowers may be able to refer back to their loan documents to gain some understanding of the process, but the best option is to call an expert to get advice.

There is a national help line that is sponsored by the Homeownership Preservation Foundation.  This hotline is referred to as the “HOPE Hotline”; the number is 888-995-4673.  There are also local organizations to contact for face-to-face help (see list at end of post).  One organization that I’ve heard good things about is the Greater KC Housing Information Center (816-931-0443).

One possibility for some homeowners is available due to new legislation that was passed in July; it focuses on helping homeowners avoid foreclosure and requires morgage servicers to modify loans as long as a borrower meets the following criteria:

• Default on the mortgage has either already happened or is reasonably foreseeable.
• The homeowner is living in the property as his/her primary residence.
• The lender is likely to recover more through the loan modification or workout than by forcing the homeowner info foreclosure.

The local organizations can determine which option is best for each individual homeowner and then they can walk them through the process.  They have a more direct line to banks’ loss-mitigation department than the homeowner does.  The customer service representatives that answer the banks’ phone lines are not able to make decisions about the loans, so it’s important to reach the loss-mitigation department.

Homeowners in this situation need to keep their heads held high, communicate with the lender, and seek expert advice.  There’s a lot of help out there and they are not alone!

Kansas City Area Foreclosure Resources

(Below are free foreclosure-counseling resources in the Kansas City area):

ACORN Housing 816-444-0804

Catholic Charities 816-931-9399

El Centro, Inc. 913-677-0100

Greater KC Housing Information Center 816-931-0443

Harvest America Corp. 913-342-2121

HomeFree USA 816-822-7241

Legal Aid of Western Missouri 816-474-6750         

Missouri Housing Development Commission 816-759-6600  

Neighborhood Assistance Corp. of America 816-531-6222

Neighborhood Housing Services of Kansas City Missouri, Inc. 816-822-7703 ext. 215