Homeowners get relief

Published 12:12 am Saturday, February 11, 2012

Foreclosure settlement may trickle down

The recent $37 billion settlement reached by states, the federal government and the nation’s five largest banks could benefit local homeowners confronting foreclosure.

N.C. Attorney General Roy Cooper announced North Carolina would receive $338 million through the settlement.

Of that total, $63.7 million would “provide for housing counselors, legal help, financial fraud detection and prosecution, general economic reparation for the state and fines and penalties which go to the public schools,” reads a news release from Cooper’s office.

Of the remaining cash, $33.57 million in payments would be made to foreclosure victims, while $179.51 million would be used to reduce principal payments or otherwise help homeowners risking default on their mortgages, the release shows.

And $61.52 million would be employed to refinance loans for people whose payments exceed their homes’ worth.

The agreement with the banks would reduce “improper foreclosures,” prohibit foreclosures “while the homeowner is being considered for a loan modification,” and, “Allow homeowners to appeal denial of loan modification applications,” Cooper’s office announced.

“Some foreclosures have to happen, but they must be done correctly and fairly,” Cooper said.  “While this should have been the standard all along, our investigation has shown that it wasn’t, and it might never have been without this settlement.”

The settlement comes as part of a “massive enforcement effort launched in October 2010 as state attorneys general, state banking regulators, and nearly a dozen federal agencies joined forces to investigate mortgage servicing and foreclosure abuses,” the release reads.

It’s unknown how many Beaufort County homeowners might benefit from the agreement.

As of Thursday, about 20 foreclosures were on file, in various states of disposition, at the Beaufort County clerk of court’s office. Of these, at least one had been appealed in December 2011. A handful had been postponed, at the request of the note holders, to give the mortgage holders more time for loan modification or to settle their debts.

Tax records show there are 15,224 single-family housing units — excluding townhouses and condominiums — in Beaufort County.

The 20 foreclosures documented at the clerk’s office represent a snapshot of a long-term trend.

A better indicator of that trend may be found in numbers compiled from public records by the North Carolina Justice Center, a left-leaning advocacy group in Raleigh.

Those numbers show that, in 1998, Beaufort County recorded 57 foreclosures.

Foreclosures here soared to 152 in 2004.

In 2010, there were 173 foreclosures in Beaufort County.

Bobby Parker, the county’s tax administrator, said most of the foreclosures his office sees are initiated by lending institutions, not by the county. The county can initiate foreclosure proceedings on delinquent taxpayers.

Asked whether the settlement money could help jumpstart the local housing market, Parker expressed hope that it would. He recalled that, locally, buying and selling peaked years ago, reaching a plateau in 2005 and 2006, when real-estate speculation was more common.

“Some properties were turning over three times a year,” he said. “We don’t see that anymore, though.”

Scott Campbell is a local Realtor who asserts people should consult real-estate experts and be prepared to deal with the shifting landscape in his field.

“With these new programs always coming up and changes happening, it shows the volatility in the market in the sense of we’re all trying to catch up to the rush of people having problems,” Campbell said. “The government’s trying to keep up with it, and the real-estate agents are, and the homeowners are. It’s a fluid situation with changes coming down the pike all the time.”

The Rev. David Moore is president and chief executive officer of the nonprofit Metropolitan Housing and Community Development Corp. in Washington. Moore said Metropolitan had placed 350 families and/or individuals in homes over the past couple of decades, with just two of those homeowners falling into foreclosure.

Moore said Metropolitan emphasizes credit counseling, steering low-to-moderate-income people toward homes they can afford.

“The key there is that we don’t let you get a house that costs $150,000 when all you can afford is $90,000,” he said.

Told about some of the terms of the settlement, Moore was pleased, and hopeful the agreement would begin to “right the wrongs” he said are manifest in the housing crisis.

“I have never seen, in my lifetime, the devastation,” he said of the housing meltdown. “And it was not racial, it was economic. There has somehow got to be a way to make the American dream of homeownership a reality.”