Forum gives homeowners foreclosure advice

Rita Ruiz is in a vicious financial circle.

After digging herself into debt to try to help her son from losing his home last year, she is facing foreclosure herself.

The north Phoenix resident found some hope at the Surprise Home Preservation Forum and free counseling event Wednesday night.

The event, coordinated by the Surprise City Council and the Ad Hoc Committee on Foreclosures, and sponsored by Credit Union West, brought together a panel of financial experts who answered questions from the audience. About 200 people attended the event.

Ruiz also signed up for a free, one-on-one counseling session and is considering doing a short sale on her home.

"It's getting harder and harder for me to make my payments," Ruiz said. "When my son put his home up for sale, he didn't get the full amount that he should have. So he didn't pay me back what he owed, and I got stuck with the bill."

Surprise Mayor Lyn Truitt kicked off the event, saying the prospect of foreclosure is an increasingly common event, "faced by families over the kitchen table everywhere."

"It's a lonely feeling," Truitt said. "Tonight we bring hope and a process for people facing mortgage challenges to face those challenges successfully."

Councilman Richard Alton said the mortgage crisis has affected him on two levels.

"I lost my job about eight months ago in the banking industry," Alton said. "And my wife, who was in real estate, lost hers four months ago. So we have felt the effects of the economic strain."

"It has pushed me into retirement a little early," Alton said. "But it's OK. We're all in this together."

Panelists Susan Marcell from HUD/FHA, Dave Barnett from Accel financial services, Bob Birr of Credit Union West and Monica Sandschafer of Arizona ACORN, the Association of Community Organizations for Reform Now, fielded audience-submitted questions.

Among the information stressed was the need for challenged homeowners to meet with a HUD-approved housing counselor.

Also, homeowners who have been notified that their homes will be foreclosed should stay put, Marcell said.

"Repayment plans are only available if you are residing in your home," Marcell said. "The best bet is to use a HUD-approved counseling service as we do not allow them to charge certain fees, and there are caps on other charges. You could go to other counselors and have them charge fees and do nothing for you."

Additionally, there is a high potential for scams when homeowners face foreclosure since that information is public record.

"There are folks signing over their homes to a company and are now renting their home," Marcell said. "If they miss a payment after that, they no longer have a home and any equity they had built up has been signed away to the company.

"This is a crisis and people like to make money from crisis. There are unscrupulous companies."

There are three ways of modifying a loan, experts said. Loans can be subject to a repayment plan to spread a portion of past-due payments over several months to bring the account current. Secondly, the loan could be subject to a forbearance agreement, which would tack on additonal payments at the end of the loan. The final way would be a loan modification, with a change to the payments, balance or interest rate.

Though there aren't any special programs available for those who want to purchase a foreclosed home, one program allows police, fire and emergency medical personnel to purchase a HUD home in a revitalization area for half-off the listed price, with an agreement that they live there for three years.

Rosie Hardenburger, vice president of marketing for Credit Union West, said she expects even more residents to glean information from the event when it is broadcast on Surprise Channel 11.

"A lot of people are shy," Hardenburger said. "But a lot will sign up for the one-on-one counseling sessions, which are scheduled through Saturday. (Homeowners) need to talk to someone about their unique situation."

For the Channel 11 broadcast schedule, call 623-222-1400 or visit www.surpriseaz.com/files/granicus/index.html.