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Highlands Today

County Can Help Stem Foreclosure

Marc Valero/Highlands Today

Penny Phillipi, director of the Highlands County Housing Department, and Carmen Miranda, a housing programs assistant, review requirements for the foreclosure intervention program.

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By Jim  Konkoly | Highlands Today

Published: October 25, 2007

The Highlands County Housing Department is known primarily for helping low- and moderate-income people reach the American dream of home ownership.

More often than in past years, the housing program is also helping people hold onto their home by avoiding foreclosure.

So far this year, 18 homeowners have received zero-percent loans from the housing program to catch up on and prevent further past-due mortgage payments, and four applications are pending.

"We've doubled the cases in our foreclosure intervention program," said Penny Phillipi, director of county housing programs.

Following the national trend, home foreclosures in Highlands County are up sharply over last year and more than double the number of five years ago, according to the Highlands County Clerk of Courts office.

From Jan. 1 through Wednesday, 668 home foreclosures had been filed, Priscilla Michalak, director of the clerk's civil division, reports. That compares with 397 home foreclosures filed for the same period in 2006, Michalak said, and 299 for the same period in 2002.

Phillipi welcomes any chance to spread the word about the county's foreclosure intervention assistance because, she said, "I don't think a lot of people are aware of this program."

Carmen Miranda, county housing programs assistant, agrees.

"Some banks have called me and asked, 'Do we really have such a program?'" Miranda said.

To qualify, a homeowner cannot have past due property taxes, must be behind at least one month in mortgage payments, and cannot have a foreclosure action filed yet. Homeowners must show that they temporarily can't meet their mortgage payment due to circumstances beyond their control, such as an unforeseen home repair, loss of a job, sudden medical expenses, or divorce or separation, Phillipi said.
Qualifying applicants can get a zero-percent, three-year loan for up to $2,000 for mortgage payments, made directly from the county to the mortgage holder. Late payment penalty fees cannot be covered by this program.

To secure the intervention loan, a homeowner has to attend the housing department's money management skills class.

While the program can't help everybody avoid foreclosure, it has never failed for the homeowners who have qualified. Phillipi reports that not one person helped through this program has ended up with a foreclosure action.

"This is a way for the county to help people get back up on their feet again," Phillipi said.
Foreclosure intervention has been offered since 2001 but was seldom used until the 2004-05 storms put some homeowners into temporary financial emergency.

"In the early years we averaged two or three (per year)," Miranda said. The number grew to about 10 per year following the heavy storm years and has risen steadily this year, she said.

"There are many factors," Phillipi said about the increase. "But," she added, "I think the biggest is the loan products put out where the interest rate escalates."

With some adjustable rate mortgages, a low initial interest rate climbed quickly and left people unable to handle the higher monthly payments when they encountered an unexpected financial setback, she said.

"Historically," Phillipi added, "the main reason we were doing foreclosure intervention was because of a life crisis. Now what we're seeing is folks needing to get their mortgage up to date so they can refinance back into a 30-year fixed rate."

Another factor, Miranda said, is the jump in home prices over the past three years.
Just several years ago, she said, "we were seeing mortgages of $400 to $500 (per month), and a maximum at $700. Now, we're seeing payments of $800 to $1,000."

Phillipi advises people to talk with their mortgage holder and check on the county's intervention program as soon as they can't meet a monthly home payment.

"If you're three months behind, the bank is going to foreclose, that's the rule of thumb," Phillipi said. "When people come here in a desperate situation, it's usually too late for us to help them."
Repayment of the zero-percent loans is scheduled to start six months after the loan is provided, but the first payment can be put off another six months if necessary, Phillipi said. Payments are negotiated and can be as low as $25 per month.

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