On buses, in the newspaper, in the mail, and even on our air, NE Ohio borrowers in mortgage trouble are directed to call one number.
Call Center: 211, First Call for Help.
The United Way's 211 First Call for Help has been assisting callers with free mortgage assistance since 2006. It's a referral center, as United Way's Steve Wertheim explains, workers at 211 send borrowers to one of eight nonprofit HUD certified counseling agencies, all partners in the county's "Don't Borrow Trouble program."
Steve Wertheim: We have made about 3300 referrals in the first six months of the year to counseling centers in Cuyahoga County.
Callers get help from people like Deborah Jones at Community Housing Solutions. Jones has been helping Cleveland-area borrowers negotiate workouts with mortgage lenders for 34 years and she says the number of clients in trouble has only grown.
Deborah Jones: It's really a hard situation. And people don't know, it's about setting financial priorities and even when you do that, it's still difficult when you have limited money.
A study by Cleveland State University finds that 52 percent of borrowers who go through one of these nonprofit agencies get a solution that helps them avoid foreclosure. Kathy Hexter at CSU's Levin College of Urban Affairs says there has been no long term study of the program's effectiveness.
Kathy Hexter: We're really trying to figure out is there a way to do some follow up with the people who get help to see if six months from now, a year from now, are they on a better track? Is there home more affordable?
And are they still avoiding foreclosure? A recent study by the federal government found that nationally, about half of all loans that are modified but leave the payment increased or unchanged go bad after nine months. And other national research indicates that most mortgage modifications don't reduce the monthly payments.
A state taxpayer-funded foreclosure rescue fund gives a clue to how some loan modifications are faring in our region. Cleveland's Neighborhood Housing Services helps administer the program. Executive Director Lou Tisler says the program has provided $3.4 million in interest-free loans to borrowers who are late on their mortgage payments because of an event like a lost job or medical problems. Tisler says only 4.7 percent of those loans go bad.
Lou Tisler: I think a lot of that success has to do with the way we screen the people coming through because there needs to be a trigger event, it needs to have been over and they need to be able to afford the home going forward. And the banks and lending institutions generally want to work with us because we are bringing money to table.
People in foreclosure are often inundated with advertisements offering for help. Deciphering the good help from the bad is not easy. Ohio's Attorney General has filed 23 cease and desist actions against foreclosure rescue firms. Sue McConnell of Cleveland's Better Business Bureau hears regularly about this type of fraud.
Sue McConnell: Ultimately the company's phone number is disconnected, their website is down, you try to call them on the phone, their voice mail is full and not taking anymore messages. And what you've done is wasted time and money that you needed to save your home from foreclosure.
And as for this weekend's event in Cleveland hosted by the Neighborhood Assistance Corporation of America? NACA - a nonprofit housing agency that is also a mortgage broker - says it is able to get lenders to rework a loan 80 percent of the time. consumer advocacy group says there is no independent verification of that statistic. Jim Campen at the consumer advocacy group, Americans for Fairness in Lending, says NACA offers great services but he has has been unable to independently analyze NACA's claims of success.
Jim Campen:So they do not make information about their loans available to people who could provide some accountability.
NACA's foreclosure summit lasts till Sunday.