Special Report
KEEP YOUR HOME AFFORDABLE / ON THE COVER
Fending Off
Foreclosure
Middle-income Jews in home-value freefall
get financial aid from the Jewish community.
A
husband and father of four lost
his job. Not only was the family
struggling to make the mortgage
payment and pay other bills, but they also
were trying to help an elderly parent living
in a nursing care facility. There was sig-
nificant distress within the family and fear
regarding potential loss of their home.
The interest rate was 8.5 percent ARM
(adjustable-rate mortgage). When the
family got three months behind on the
mortgage payment and received a let-
ter of intent to foreclosure, they came
to the Jewish Housing Association of
Metropolitan Detroit (JHA) hoping to try
to save their home. During this time, the
father actually located work. JHA was able
to negotiate a loan modification and was
able to reduce the interest rate to 5 percent
and extend the mortgage term. The family
now is saving about $700 a month on their
mortgage payment.
A recently widowed senior citizen came
to JHA. He had lost substantial funds in
the stock market — funds he was count-
ing on for his retirement. His only remain-
ing income was Social Security. A review
of the mortgage documents revealed that,
only a few years before, he had signed
mortgage documents for an option ARM
rather than a fixed rate. JHA was able to
negotiate with the mortgage company and
reduce his mortgage payment so he was
able to stay in his home.
A family had never been behind on
their payment, but was facing an increase
in their mortgage due to the ARM going
up. They were expecting another child
soon, which would put additional stress
on their budget. JHA was able to negoti-
ate with the mortgage company to fix the
interest rate at the initial rate of 4.75 per-
cent for the life of the loan and extend the
term of the mortgage, saving the family
$400 a month on the mortgage payment.
The Jewish Housing Association of
Metropolitan Detroit has assisted almost
300 families in the Jewish community
since its founding in January 2008. With
additional staff and software designed to
scale the number of people participating
in the Making Home Affordable Program,
JHA now is ready to assist as many as
2,000 middle-income families to deter-
mine if they are eligible for mortgage pay-
ment relief.
"Families are increasingly anx-
ious about being able to pay for their
basic living needs:' said Howard
Neistein, the Jewish Federation of
Metropolitan Detroit's chief admin-
istrator officer. "JHA is reaching
out to help families in the com-
munity gain more control over
their uncertain personal economic
circumstances. The Making Home
Affordable Initiative will help
restore some of the self-confidence
that they have lost during this the
turbulent economy in Michigan!'
Settling In
JHA recently received a donation
of more than 6,000 square feet
of space on the 17th Floor of the
Charter Bank Building (formerly
the American Motors Building) in
Southfield. It hired additional staff,
including a senior credit officer
with more than 15 years' of under-
writing experience as well as loan
modification specialists, to meet
anticipated demands of the pro-
gram.
Phone calls are up dramatically with
more than 40 a week now.
Combined with its existing mortgage
personnel, JHA brings a high level of
professionalism and expertise to the loan
modification process, says Managing
Director Patricia Burkhardt. Even more
important, personnel are trained to keep
each family's situation confidential. The
Southfield office is designed to ensure pri-
vacy for visitors who make appointments
or drop off packages.
Families have had their savings deci-
mated, their homes decline in value by as
much as 50 percent, their mortgage now
exceeding the value of their homes and
their retirement delayed if not destroyed.
"These families don't realize that the
`Making Home Affordable Initiative' can
reduce their monthly mortgage payments
up to 50 percent:' Burkhardt said. "The
intent of the program is to allow people
to sleep better at night and to avoid being
delinquent on their mortgage due to a
worsening economy especially in the
Detroit area!'
"These families think there is nothing
they can do to improve their situation and
don't bother to call to determine whether
they qualify for this program:' said Licia
Beemer, senior credit officer.
"Federation is very pleased that the
Jewish Housing Association is
being proactive in creating a loan
modification program that can
help any family concerned about
mortgage payments now or in
the future,' said Linda Blumberg,
Federation's planning and agency
relations director. "We encourage
families who have concerns about
their ability to make mortgage
payments to contact JHA."
According to recent reports,
more than 45 percent of all home
mortgages in Michigan are under
water (that is, the mortgage on
the house exceeds the value on
the home).
In Michigan, according to the
Case-Shiller report, property val-
ues have fallen to as low as 1995
levels and an even greater num-
ber of homes are under water.
JHA will analyze each situation
Standing: JHA's Debi Gibbs, program assistant, and
regardless of whether the hom-
Patricia Burkhardt, managing director. Seated: Licia
eowners are delinquent on their
Beemer, senior credit officer, and Mary Beth Frank,
mortgage payments. They simply
loan modification specialist.
Foreclosure on page 12
December 3 * 2009 11