Advice offered on foreclosure

The rate of foreclosures and the fallout from subprime lending aren’t getting any better, not even in Lawrence.

Housing and Credit Counseling Inc. had a seminar Thursday afternoon in Lawrence to discuss the effects of foreclosures and steps homeowners should take to avoid it.

Anju Mishra, a HCCI consumer credit counselor in Lawrence, said she has seen a surge in the past two months from people who are defaulting on mortgages and seeking help. In fact, she said almost half of her appointments this week fall into that category.

Jackie Blaesi-Freed, a HCCI consumer credit and housing counselor, said mortgage troubles could affect far more than homeowners. Credit will be harder to come buy for all consumers and tax rolls could see a drop as property values decline.

“The foreclosures could be over in five years, but the impact to consumers – it could be decades before everything rights itself,” Blaesi-Freed said. “We are looking at a long, long-term disease.”

Because Lawrence hasn’t seen the job layoffs that other areas of the state have, the foreclosure rate still remains below the state average, HCCI consumer credit counselor Robert Baker said. But that doesn’t mean the town is immune.

Baker said he is already seeing credit opportunities disappear from potential homeowners and more landlords running credit checks to make sure their renters have good financial histories.

Much of the time when foreclosures looms, Blaesi-Freed said the homes do end up back in the hands of the lender. And, many clients go through bankruptcy.

“There are some days that is what it feels like I do, I get really good at giving houses back to the mortgage companies,” Blaesi-Freed said.

If homeowners are coming in for help six months after they have missed mortgage payments, Blaesi-Freed said, they are coming in a little too late. Homeowners have a better chance to work out a deal if the come within 30 days of falling behind or even before the first late payment.

Contacting credit and housing counselors does help, Blaesi-Freed said. They can make the first call to the mortgage company to see if a repayment plan or other measures can be taken. They also can work to help sell the home back to the lender to avoid the foreclosure process.

As for the new proposal put forth by President Bush, which would provide a rate freeze for troubled homeowners, Blaesi-Freed said it does nothing for those already faced with higher rates and a small percentage of the troubled homeowners would qualify.

On the upside, Baker said the rash of foreclosures makes it a great time for first-time home buyers to enter into fixed-rate mortgages because they are so low.