bLocal officials back program to help homeowners avoid
foreclosure
Owning a home has long been a part of the American dream.
But for many local homeowners, that dream is quickly turning
into a nightmare.
With Hollister in the middle of what some officials are calling
a foreclosure
”
crisis
”
– at the end of February, there were 589 homes within the city
limits in some stage of foreclosure – many are looking for a
helping hand. That hand, officials say, may be coming from a group
called the Homeowner Rescue Alliance (HRA).
bLocal officials back program to help homeowners avoid foreclosure
Owning a home has long been a part of the American dream.
But for many local homeowners, that dream is quickly turning into a nightmare.
With Hollister in the middle of what some officials are calling a foreclosure “crisis” – at the end of February, there were 589 homes within the city limits in some stage of foreclosure – many are looking for a helping hand. That hand, officials say, may be coming from a group called the Homeowner Rescue Alliance (HRA).
“The (foreclosure) problem is getting so huge even lenders don’t have the resources to deal with it,” said April Wooden, Hollister’s Redevelopment Agency (RDA) program manager. “Strength in numbers is the only way we will get lenders to listen.”
That idea is the basic principle behind HRA, a San Jose for-profit company co-founded last year by Julius Nyanda, the group’s managing director and chief executive officer of the American Funding and Financial Corporation. HRA is partnering with Assemblywoman Anna Caballero to host a series of free public workshops to help homeowners facing the possibility of foreclosure. A community forum introducing HRA was held in Hollister March 6; the next workshop for homeowners in this area will be held in Gilroy, Saturday, March 22.
The main thrust of the workshops is to group homeowners together by lender in order to negotiate better loan terms on existing mortgages, Nyanda said.
HRA’s pilot program, geared towards cities in the 28th Assembly district, is intended to educate homeowners on the country’s housing crisis as well as detail available options to avoiding foreclosure, Nyanda said. Cities have been divided into three target zones; Hollister, along with Gilroy and Watsonville, is in Zone 1.
The program is based on a five-step approach: educating homeowners about their rights and responsibilities; making individual recommendations as well as packaging homeowners by lender to negotiate better terms as a group; determining how to keep losses to a minimum in one of three ways – keeping, selling or refinancing the home; providing objective analysis of a particular loan to the mortgage investor; and teaching homeowners to better manage finances and prepare them for a more successful re-entry into the housing market.
Having HRA act on their behalf should make it easier for homeowners to avoid foreclosure, said Violeta Perez, HRA’s manager of business development.
“Homeowners are calling lenders and not getting any help,” she said. “Lenders are bound to the agreements they have with their investors. Their allegiance is to the investor, not the homeowner, because that’s who is actually paying them.”
Although all homeowners are invited to attend the workshops, HRA is targeting lenders who tend to do the most business locally, including Countrywide, Chase, Wells Fargo, Indymac, Washington Mutual, HSBC, GMAC, Downey Savings, Wachovia (World Savings) and America’s Servicing Company. Perez said the goal is to get as many as 1,000 homeowners to participate in the pilot program.
“Investors deal with amounts of $100 million, so when you pool loans together the dollars add up, and that’s a language they understand,” she said. “A $400,000 loan means nothing to them. So what HRA can do is pool homeowners, take a bulk of loans to a lender and negotiate aggressively on the homeowners’ behalf. If we can bring in homeowners as a group, we can get them a better deal.”
Perez said she feels HRA is the only viable resource currently available to homeowners struggling to avoid foreclosure.
“How else are they (homeowners) going to get terms they can afford?” she said. “Working with a lender one-on-one is not impossible, but the odds of having them listen are very slim.”
Lenders can also benefit by using HRA’s services, Perez said.
“It costs a lender around $60,000 to put a home into foreclosure,” she said. “The lenders also lose the income of a monthly payment and the value of the home drops. So what we ask lenders is this – do you want to lose 50 cents on the dollar by going to foreclosure or just $50 by working with us?”
Homeowners will not be charged for any of HRA’s services. Any money HRA makes during negotiations will be paid to the company by the lenders, Perez said.
“What we will ask of the lenders is to pay us a per file fee, meaning that we get paid for every file we bring them,” she said. “We don’t know how much that fee will be, because we don’t have a contract to act as a negotiator yet.”
Approximately 20 people attended the Hollister forum, including county supervisors Pat Loe and Jaime De La Cruz, supervisorial candidate Marian Cruz and her husband, Bob, Hollister Mayor Doug Emerson, Councilmember Monica Johnson, David Huboi and local realtors Rick Pennington and Renee Kunz. There were no at-risk homeowners at the forum. Although most of the information provided by Nyanda was well-received, some attending the forum have questions as to whether or not HRA’s approach will work.
“I can’t judge the organization, since I don’t know much about it,” Kunz said. “The concept is excellent. They are trying to bring everyone together and create change, and that is good.”
HRA will be holding Saturday workshops through April 3; Perez said she would encourage any homeowner concerned about their mortgage to attend.
“Come and hear us out,” she said. “No one is obligated to do anything. But homeowners should pursue all your options. If they decide to go with HRA, they don’t have to stop anything else they are already doing. Whoever or whatever can work out the best solution the fastest is probably the best answer for you.”
The next HRA workshop will be held Saturday, March 22, at Gilroy City Hall, 7351 Rosanna St. Registration will be from 9:30-10 a.m. and the workshop will be from 10 a.m. to noon. Homeowners should bring all documents regarding their mortgage as well as any letters, past due notices or foreclosure notices sent by their lending company. Homeowners interested in attending can call
1-800-471-9030 for more information.
By the Numbers
138,027 People living in Hollister, Gilroy and Watsonville, dubbed Zone 1 by HRA.
32,107 Homeowners in Zone 1 who have been identified as at risk for foreclosure by HRA
2,700 Homeowners in Zone 1 who have made a late mortgage payment
589 Homes in Hollister in some stage of foreclosure as of Feb. 21, 2008
481,392 Number of foreclosures in California in 2007
142,429 Number of foreclosures in California in 2004
(Information provided by the Homeowner Rescue Alliance)
