Bankers urge Vermonters facing foreclosure to seek help

MONTPELIER, Vt.—Home foreclosures in Vermont are up 172 percent over last year and state officials are urging people facing foreclosure to seek help before it becomes a crisis.

The increase in foreclosures is expected to increase as more people face mounting food and fuel costs and see the payments increase on adjustable rate mortgages.

"The sooner we hear from them, the sooner we can get involved and the more we can help," said Paulette Thabault, the commissioner of the state Department of Banking, Insurance, Securities and Health Care Administration.

While housing foreclosures are up across the country, Vermont is among the states least affected. Nationally, the problem is drive by adjustable rate mortgages given to customers with questionable credit histories that are causing some homeowners to face significant increases in their payments.

Only about 3 percent of Vermont mortgages are in the subprime adjustable-rate type, compared with 6 percent in the Northeast, officials said. Banks with headquarters in Vermont are showing a .51 percent delinquency rate compared with 1.8 percent for banks nationally, the department said.

Nevertheless, there were 311 foreclosures in 2005 and 1,209 in 2007. The 2008 figure is ahead of the 2007 rate.

Since the state set up its toll-free number the state has received 18 calls. Officials were able to help two of the callers out of trouble, said BISHCA Deputy Commissioner Tom Candon. Officials are working with homeowners in nine other cases.

BISHCA employees steer homeowners to assistance such as credit counseling and refinancing options, Candon said.

Chris D'Elia, of the Vermont Bankers Association, said banks would work with customers to forestall foreclosure, but they can offer no guarantees.

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Information from: The Burlington Free Press, http://www.burlingtonfreepress.com