Foreclosure rates rise, Siskiyou no exception

Charlie Unkefer

The statistics are alarming. In March alone, the national foreclosure rate surged 44%, making it one of the largest single month jumps in recent history, with  370,000 homes.   In the Western states region, the statistic was even higher at 52%.

Closer to home, the numbers don’t look so good either. According to Realtytrac.com, there are currently 65 homes in foreclosure in Siskiyou County. Of that number, 25 are in Weed, 10 in Dunsmuir, 9 in Mt. Shasta, and 7 in Yreka.  

Though foreclosures have been steadily rising for some months now, the recent surge was due, in part, to moratoriums that were lifted by some of the larger lending companies. Currently, it is estimated by the US Census  Bureau that 19.1 million homes are unoccupied nationwide.

According to Jacob Barr of Ridgecrest Mortgage in Mt. Shasta, the countywide foreclosure rate is high, though he did not have any specific statistics relative to previous years.

For Renee Getreu, assistant program manager of  the Jefferson Economic Development Institute, the trend is troubling. “There are very little resources in the area to help people deal with foreclosure issues,” she said. 

Getreu noted that while JEDI does have some housing counseling services, they are not qualified to deal with the intricacies of foreclosures. She did note, however, that there is some general information on their website that they can help people get oriented and find more resources.

Most notably, the JEDI website recommends that, at the first sign of trouble, individuals become pro-active.  The site suggests contacting the lender right away, as well as contacting a HUD-certified Housing Counselor.

Getreau said these counselors are trained to guide individuals through the process of preventing foreclosure. Some charge a fee for their services and some are free. 

Jessica Murr, a Yreka based realtor, parroted Getreu’s advice regarding the importance of making contact with the lender.  “Don’t shy away from dealing directly with the bank,” she said, also noting that with the Obama Administration's recently activated  Making Home Affordable Program, there is assistance available.  While the process may seem daunting, she encourages individuals to not despair.

Wading through a sea of acronyms

The recent onslaught of   programs designed to deal with many facets of the current housing crises can, at times, be confusing.  The following information, provided by an April 28 Treasury Public Affairs press release, lends some clarity to the situation:

 Making Home Affordable is a comprehensive plan to stabilize the U.S. housing market that was first announced by the Administration on February 18.  The three part program includes aggressive measures to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac; a Home Affordable Refinance Program, which will provide new access to refinancing for up to 4 to 5 million homeowners; and a Home Affordable Modification Program, which will reduce monthly payments on existing first lien mortgages for up to 3 to 4 million at-risk homeowners.   

Twelve servicers, including the five largest, have now signed contracts and begun modifications under the program.  Between loans covered by these servicers and loans owned or securitized by Fannie Mae or Freddie Mac, more than75 percent of all loans in the country are now covered by the Making Home Affordable Program.

 The Three top of Scams

Complicating matters, however, is a recent rash of loan modification scams that are taking many vulnerable homeowners by surprise.  An   article posted on makinghomeaffordable.gov noted that currently, the FBI  is investigating more that 2,100 mortgage fraud cases, up almost 400 percent from five years ago.   

According to the Consumer Credit Counseling of Southern Oregon,  there are three common  loan modification scams:

The first is the individual posing as a “foreclosure specialist.”  The “specialist’ is a phony counselor who charges outrageous fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for him or herself.  None of the actions result in saving the home.  In effect, the scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to the fraudster. 

Mortgage broker Jacob Barr takes it a step farther.  “Do not pay anybody anything for a loan modification, especially anyone who is asking for money up front.”

The second common foreclosure scam is the “lease/buyback.” In this case, homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the “rescuers” end up  with most or all of the equity.

Last is the “bait and switch.”  In this case, homeowners think they are signing documents to bring the mortgage current.  Instead, they are signing over the deed to their home.  Homeowners usually don’t know they are signing documents until they get an eviction notice. 

Linda Cade, Director of the Consumer Credit Counseling of Southern Oregon, which covers Siskiyou County, lamented that her office is unable to handle foreclosures, though the agency does, like JEDI, offer some basic housing counseling. 

Cade noted that the threat of foreclosure is often just one of the many challenges faced by families in the region.  “In addition to threat of foreclosure, we see people who are also dealing with  unemployment or underemployment, consumer debt and medical bills.”  The problems, she asserted, are often intertwined.

Cade noted that her office has been busy over the course of the last 18 months.  

Resources

Though local counsel may be limited, there are a host of resources that can be helpful.  All of the individuals interviewed for this article emphasized the importance of personal empowerment and getting as much information as possible. 

“It can be easy to put your head in the sand and think the problem is going to go away,” said Jacob Barr. “It’s not,” he concluded. 

The following websites were recommended: e-jedi.com, makinghomeaffordable.gov, hud.gov, financialstability.gov.