Owners of Hub homes get a lift

Event tackles foreclosure risk

Vulnerable homeowners sat across tables from their mortgage servicers in quiet classrooms at Madison Park High School yesterday, trying to strike new deals.

The city's Homeowner Foreclosure Prevention Workshop, which organizers said was the first event of its kind in Massachusetts, allowed scores of borrowers to find ways to stave off financial ruin by meeting face to face with lenders, who have been increasingly willing to modify loan terms as the foreclosure crisis has spread. Many homeowners discovered they might qualify to temporarily lower their interest rates or delay delinquent payments without penalty, modifications they said could mean the difference between keeping and losing their houses.

"I can breathe," said Tasha Brown, 35, a single mother of two young children. Brown learned in a meeting with Countrywide representatives yesterday that she may be able to reduce her monthly mortgage payment.

Brown, who earned about $40,000 last year running a day care service out of her home, said she had fallen behind on her payments on her adjustable-rate mortgage, which had risen to about $2,800 a month.

She has been unable to sleep lately, worrying about what would happen to her family if she lost the house. "When you're in fear, you're paralyzed," she said. "I don't even open the mail."

Communication between mortgage servicers and homeowners facing foreclosure is often difficult or nonexistent. Lenders can be hard to reach or unwilling to modify a loan, said several homeowners who attended yesterday's workshop, and homeowners are often too intimidated to reach out for help. Mayor Thomas M. Menino discussed the idea of holding one-on-ones between lenders and borrowers at a meeting with major lenders in January.

"One of the folks who are in danger of losing their homes said it was the first time we were able to speak with our servicer today, face to face," Menino said yesterday morning after greeting some of the people who attended the workshop. "Today everything's automated: Press one for this, press two for that. By them sitting down and talking with their servicer, they were able to work out their problems."

More than 700 properties in Boston fell into foreclosure last year, about three-quarters of them in Dorchester, Roxbury, Hyde Park, and Mattapan. Yesterday's workshop was one of a host of efforts the city has made in the past two years to contain the crisis, including the creation of a Foreclosure Intervention Team to set policy, a counseling network to guide struggling homeowners, and a partnership with the state Real Estate Bar Association to provide free legal services for low-income homeowners in danger of foreclosure. The Foreclosure Prevention Initiative collectively helped 212 homeowners avoid foreclosure between 2006 and 2007, according to the city.

Senator John F. Kerry, who dropped by yesterday's forum, said he was working to secure $10 billion for states to use to help first-time home buyers and prevent foreclosures.

"That means money in the hands of the mayor and others to be able to negotiate against foreclosure, to keep people in their homes, and to make a difference in their communities," he said.

To draw at-risk homeowners to yesterday's workshop, the city tapped five leading mortgage servicers - Countrywide, Wells Fargo, Washington Mutual, Citi, and HomEq - to mail letters to clients in dire financial straits, inviting them to meet privately with representatives at the workshop.

"The lender has no incentive to see folks getting foreclosed," said Bill Cotter, deputy director of home buyer services at the city's Department of Neighborhood Development.

More than 1,400 letters were distributed, mostly in Boston. News of the workshop also traveled by word of mouth, and in a sign of how desperate some homeowners were to get help, people from as far away as Lawrence came to seek relief and advice. Organizers said 135 people attended the workshop, although not all met with mortgage servicers because their firms were not represented.

Many of those who came appeared to have been victims of scams or bad dealings. Some had bought houses they clearly could not afford; others agreed to borrow money at high rates.

Carol Anderson, a hospital administrator in her 50s who lives in Dorchester, said she and her husband, a carpenter, make $70,000 to $80,000 a year combined and borrowed $465,000 to purchase their home with no down payment. To finance it, they agreed to two mortgages with rates of 11 percent and more than 9 percent.

"I wanted a house," she said. "That was the best opportunity."

The total monthly payments of about $3,400 were just barely affordable, she said, until one day she opened her bill and was stunned to learn that the larger loan was adjustable. Now her payments are more than $4,800 a month.

This winter they kept their gas heat off and made do with electric space heaters.

She came to yesterday's workshop hoping to speak with her mortgage servicer, but the company was not there. She did speak with a counselor, though.

"I'm hoping I can get a mortgage I can pay," she said. "I feel hopeful."