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Faith in Action to hold forum on foreclosure rescue scams, Making Home Affordable program

BY ANDRAE GONZALES, Contributing writer | Monday, Oct 12 2009 05:38 PM

Last Updated Monday, Oct 12 2009 05:38 PM

Last Christmas, the Hernandez family faced a huge, stressful problem -- they were facing foreclosure.

Gloria Hernandez, the family matriarch, lost her job. Her husband, David, worked for a car dealership where sales had dropped drastically and, as a result, hours were cut.

The southwest Bakersfield family, which had never been late paying bills, found they couldn't make their $1,900 monthly mortgage payment.

It was not a very merry Christmas.

Gloria and David did everything they could to save their home. They called their bank almost every day.

"We sent hardship letters, but they said there was nothing they could do. They told us to rent out a room or get a second job," Gloria said.

The Hernandez family, with three kids ages 16, 11 1/2, and 7 years, feared the worst. "I said, 'I think we need to pack up and move,'" David said. But where? Gloria had a bit more hope: "If God gave us this house, and if it was meant for us to have it, we will be OK."

Then in June, Gloria and David heard about the HOPE Now outreach event at Rabobank arena. There, they met face-to-face with a loss mitigation officer to discuss their situation. After reviewing the family's documents, the bank representative told them they would qualify for a loan modification. Within 10 days they received loan modification documents in the mail. They now pay $1,258 a month with a reduced interest rate of 4.5 percent for the first five years, and 5.37 percent thereafter.

"Like they said, there was Hope," Gloria said. "I was so happy. David was not stressed out anymore; he actually had a smile on his face!"

Also at the HOPE Now event, another Hernandez family: Alex and Roxanne Hernandez from Arvin. Alex and Roxanne, along with their two kids, ages 5 and 7, had lived in their home for a little more than three years. But Alex, a union carpenter, was out of work for more than four months.

"Work was good, then I got laid off. Since I am the main provider, we went into a big spiral. I went from making $1,400 a week to $400 in unemployment," Alex said. With other living expenses, it became difficult to make their $1,800 a month house payment.

"Everyone was stressed, even my kids. My 7-year-old said, 'We're going to be homeless. I don't want to be homeless, I want to live in this house,'" Roxanne said.

Alex and Roxanne met with a representative from SunTrust during the HOPE Now event. The representative asked Alex to send check stubs as soon as he began working again. The family qualified for the federal government's Making Home Affordable program, and the bank modified their loan. In their three-month trial period, the Hernandez family pays $1,105 a month at a 2 percent fixed rate.

Alex and Roxanne, once putting mortgage payments on credit cards to stay current, breathed a bit easier.

"It's a big relief," Alex said.

Faith In Action Kern County has heard a number of success stories of families saving their homes from foreclosure. For more than a year, a team of Faith In Action grassroots leaders from St. Joseph's Parish has led a campaign to bring more resources to Kern to help families facing foreclosure.

In February, the group led a 700-person community action meeting at St. Joseph Parish with representatives from local and federal agencies, including HUD and the Federal Reserve Bank of San Francisco. The group won commitments from all agencies to work together to help quell the growing number of foreclosures in Kern.

As a result, several banks and national organizations have visited Bakersfield. In June, HOPE Now, a national network of lenders, partnered with Faith In Action to hold a borrower outreach event at Rabobank Arena. In August, Chase Bank held a workshop on the Making Home Affordable program for local non-profit and government leaders.

The Andrade family of northwest Bakersfield also found help at Faith in Action events. Earlier this year, the family's income dropped. Karina Andrade, a real estate agent, saw the market slow dramatically. Her husband, a contractor, felt the pinch as well. It became virtually impossible for the family to make their $3,200 a month mortgage payment.

But when Karina attended the Chase Making Home Affordable workshop, she learned she might qualify. She called her servicer, Freddie Mac, and found she did. The Andrade family is in their three-month trial period now, paying $1,646 a month at 4 percent interest.

Faith In Action Kern County, a network of more than 12 churches, is encouraged and motivated by these success stories, but also knows many other families are struggle.

"We get calls every day from people who are about to lose their homes. Hardworking people, who have either lost their jobs, lost hours, or have medical expense that make it impossible for them to pay their mortgage," said Andrae Gonzales, executive director of Faith In Action Kern County. "We have to keep the faith. We have to work together to make sure Kern County gets the resources it needs to help our families."

Faith In Action Kern County is building momentum to create a local coalition of agencies to work together in future foreclosure prevention efforts.

Darryl Rutherford, community development regional manager for the San Joaquin Valley with the Federal Reserve Bank of San Francisco, said many families have avoided foreclosure and found help where few resources exist with Faith in Action's help.

The immediate next step: warning people about foreclosure "rescue" scams.

"Sadly, there are less-than-scrupulous people who are profiting off of families during possibly the scariest moment of their lives," Gonzales said. "We need to make clear to homeowners that they should never pay upfront fees for services."

-- Andrae Gonzales is executive director of Faith in Action Kern County.