Carol Bowen has been trying to renegotiate her mortgage with her bank for months, and is frustrated at the response she‘s gotten.
After losing overtime opportunities at her nursing assistant job, Bowen has been unable to make full payments and would like to modify her monthly payments.
Cases like Bowen’s are why the state sponsored the Homeowners Mortgage Assistance event at the Connecticut Convention Center on Tuesday. The purpose of the event was to give homeowners a chance to speak face-to-face with lenders and loan servicing companies.
After going to a similar event at the XL Center in October, Bowen was hoping for some answers. “It is just a run-a-round to me,” she said.
Complicating matters for Bowen is that fact that the bank which held her loan—IndyMac Bank—was sold to One West Bank located in Pasadena, CA. in 2009. During the past few year’s she’s had documents she sent to the bank go missing and was tired of how the system works, but was glad to meet face-to-face with a bank representative Tuesday.
“The guy I met is going to take me further through the system, and I am going to get a counselor. I really need a counselor,” she said.
Bowen’s case is like that of many people who want to stay in their homes but can’t make payments. These people need information that can keep them in their homes and this is the reason why Banking Commissioner Howard F. Pitkin helped organize the event. “Communication with your bank is important,” he said.
Foreclosures in Connecticut dipped this year according to statistics from the Judicial Branch, however, the dip was artificial. Jeff Gentes, a foreclosure attorney at the Connecticut Fair Housing Center, said some banks suspended foreclosure activity last year after the state added an additional affidavit it required lenders to file before moving forward with a foreclosure. A few weeks after the state changed the process, the “Robo-signing” scandal came to light.
But the state was trying to attract homeowners to Tuesday’s event who may be recently unemployed and haven’t started the foreclosure process.
The increase in unemployment and underemployment has accelerated the mortgage crisis.
“Finding jobs and getting our arms around the housing crises is very much what will bring the economy up off of the bottom curve,” Pitkin said.
Tuesday’s event was created in the hopes of stemming an increase in home foreclosures and loan defaults. “At the very least we want them to leave with a single point of contact, as well as knowing what the next step is going to be,” Pitkin said.
The legislature’s Bank Committee Co-Chairman Sen. Bob Duff, D-Norwalk, said, in the years since the “sub prime scandal” and the weakening of U.S. economy the legislature has crafted the Foreclosure Remediation Law, Emergency Mortgage Assistance Program and in working with other state agencies has been able to keep thousands of people in their homes.
“Being able to keep them in their homes and help stabilize them has been good,” he said.
But there’s only so much the legislature can do without the help of the banks.
Many homeowners have walked away from their homes because the loan was more than the house was worth.
“What we are trying to avoid is walking away. People have families and we want to try to prevent that as much as possible,” Duff, a real estate agent, said.
Banks that for years seemed opposed to loan modifications are beginning to look at them more favorably.
“We have made it a point not to foreclose on our clients and have worked with them to modify their loans and keep them in their homes,” James C. Smith, chairman and chief executive officer of Webster Bank, said.
Webster Bank was recently recognized in a Wall Street Journal article for being a leader in mortgage modification.
“This kind of behavior is in our DNA because my father founded Webster Bank during the Depression to help people build and buy their homes. Now, here we are 76 years later up-holding the principles that drove him to start the bank,” Smith said.
According to Smith, Webster Bank assigns a counselor to each person who has an issue. The bank has done 1,200 modifications writing off about $200 million. The modifications have helped borrowers save about $350 per month.
If you’re a homeowner who may have missed Tuesday’s event Pitkin wants people to know there’s still help. He encourage people who have lost their jobs or are leaning toward a foreclosure to call the Department of Banking at 877-472-8313.