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CURRENT ISSUE:  May 5 , 2008
VOL. 46, NO. 9   •   Oakland, CA
Other front page stories
Youth violence: causes, cures
Higher food prices spark global protests
Families at risk of foreclosure find
help at Catholic Charities, Concord

For Monument Corridor residents who fear being shut out of their homes, Catholic Charities of the East Bay has opened a new door.

In response to the mortgage crisis, CCEB hired Egidia Bollini to help clients work through foreclosures, loans and property ownership issues. The service began on March 4 in Concord, and in her first six weeks, Bollini had already advised about a dozen clients.

Egidia Bollini stands outside her office at Catholic Charities of the East Bay in Concord.
The free housing counseling service targets low-income Latinos in the Monument Corridor whom CCEB fears will be particularly vulnerable to losing their homes.

“In our best tradition of addressing the needs of the poor and most vulnerable, Catholic Charities is . . . providing much needed services to those affected by the mortgage foreclosure crisis,” said Solomon Belette, Chief Executive Officer of CCEB.

With this service, Belette said, “We can deliver the help that people need to remain in stable housing and avoid unnecessary eviction and homelessness.”

The “mortgage crisis” refers to the rash of home foreclosures on now-deflated properties purchased when real estate was booming around 2005 and 2006, often with at-risk loans.

DataQuick, which monitors real estate activity nationwide, reported in April that default notices — where the bank starts formal foreclosure proceedings, but has not yet taken the house — totaled 4,718 in Contra Costa County and 3,194 in Alameda County from January to March 2008.

Bollini said her clients, mostly among the Contra Costa County delinquencies, are mainly Latino families who are first-time homebuyers and purchased within the last five years.

Bollini, who is a licensed realtor, said some of those clients have fallen behind on mortgage payments, but are able to save their homes by getting a loan modification. She said she contacts the lender and asks them to modify the payment schedule, interest rate or other terms to enable the client to pay.
If the bank agrees, Bollini helps clients with the often-voluminous paperwork the bank requires.

She has had success. One client, Bollini said, had a mortgage with a manageable interest rate that was fixed for two years. But at the end of that period, the rate jumped nearly two percentage points and became a variable loan, meaning the interest rate could go up again in six months. The client now faced default, she said.

Bollini worked with the mortgage company, which agreed to not only revert to the original interest rate, but also to fix the loan at that rate going forward.

In another case, a client’s monthly mortgage payment jumped nearly $1,000 when the interest rate adjusted, Bollini said. She was able to renegotiate the loan terms, keeping the payment hike to less than $100.

Bollini is not surprised by the banks’ willingness to renegotiate. Lenders “are glad to get some money,” she said. But she cautioned that depending on factors like the number of foreclosures it has had, the bank might say no.

Sometimes, Bollini said, homeowners are so delinquent on payments that a loan modification is not worth pursuing.

Bollini said she counsels those clients to simply stop paying the mortgage and stay in the home. She said she advises them that even after a homeowner defaults on the loan, banks often delay formal foreclosure for as much as a year because they do not want to deal with the upkeep and security of a vacant house.

Her advice to clients, Bollini said, is to set aside the would-be mortgage payment for the rent money they will need post-foreclosure.

Bollini said she warns clients, however, that defaulting will hurt their credit and may make it difficult to find a landlord who will rent to them. “But at least they aren’t in the hole,” she said.

What caused these families to become part of this mortgage crisis?

Many things, Bollini said, such as illness, job loss, misunderstanding or even deception. She cited an example where the title company failed to disclose a prepayment penalty of several thousand dollars, and another where the realtor lied about the documents the buyer was signing.

But a bigger cause, Bollini said, was the lure of buying a home — at whatever risk — and selling it for a big profit.

When the market was booming, she said, “A lot of people gambled. . . . They said, ‘I’ll pay interest only . . . in two years it may be hard for me, but I’ll take my chances.’”

After the housing market slumped, Bollini indicated, those owners had mortgages they could not pay and no equity in a home they could not sell.

A language barrier is not to blame, Bollini said of her clients so far.

Realtors, buyers and lenders all spoke Spanish, she said, and the problem is that “they were all hearing what they wanted to hear.” Realtors said whatever it took to sell the house, lenders gave loans without verifying that people had the income to pay, “and buyers simply wanted a home.”

CCEB’s free housing counseling is offered at 3540 Chestnut Ave. in Concord, Tuesday through Thursday, 9 a.m. to 5 p.m., by appointment only. Bollini, who speaks Spanish, can be contacted at ebollini@cceb.org or 925-825-3099 ext. 306.

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