Assistance for home owners

By JENNIE RODRÍGUEZ / Vida En El Valle

(Published Wednesday, July 2nd, 2008 08:59AM)

Their bills were mounting. They exhausted their credit card limits. Meanwhile, they lived paycheck-to-paycheck to pay for an increasing monthly mortgage payment.

Samuel Tamez and his wife Faye Adams found themselves facing a pit many home owners are falling into: foreclosure.

"We weren't robbing peter to pay paul, but it almost got to that point," Adams said.

The Modesto couple commissioned the help of Visionary Home Builders, a non-profit affordable housing developer in Stockton that offers free foreclosure prevention counseling.

Tamez and Adams were granted a five-year fixed rate loan, which means they will pay smaller installments for five years and then their mortgage will fall back into an adjustable loan.

The couple is one in only several families to have qualified for modified loans. "It's not a good number," said Carol Ornelas, executive director of the organization.

Most families are finding it difficult to save their homes, because they don't qualify for fixed rate loans, said Carol Ornelas, executive director.

"Most people have too much home with not enough income to justify the loans," Ornelas said.

In San Joaquín County, the median household income is slightly below $45,000, nearly $5,000 less than the state median. And that, Ornelas said, is too little income for homes on the market during the housing boom, when these families were buying homes for nearly $500,000. Those families, most who were financed with subprime adjustable rate loans, are now obligated to mortgage payments that have doubled -- or tripled -- as their homes' value decreases.

And lenders aren't willing to refinance undervalued homes with inflated debt attached to them, Ornelas added.

But there still is light at the end of the tunnel. Counselors at the organization give foreclosure clients a variety of choices to deal with foreclosure.

Those choices include helping clients find lenders willing to refinance them. They help with If they don't qualify, counselors help with short sales, where lenders allow homeowners to sell property for less than the amount owed and write off the balance.

And if the client faces an unavoidable foreclosure, then counselors help with "the healing process," Ornelas said. That healing process includes homeownership education, information on rental housing, referrals to social services agencies and plans for fixing credit rating.

The group has been receiving an overwhelming number of calls for the program. Recently, Ornelas hired four counselors for the program that's funded by the state and other avenues, including the National Council of La Raza.

Stockton continues to be the leading metropolitan area in foreclosures, according to RealtyTrac, which tracks data on foreclosures. In San Joaquín County, there were 7,560 foreclosure filing in the first quarter of 2008, nearly three times the amount from last year, RealtyTrac reported.

"It's pretty hard in many cases to pull a rabbit out of a hat," Ornelas said. But they still have choices, she said.

Send e-mail to: jrodriguez@recordnet.com