McKenna sees how national mortgage deal helps Tri-Citians

By Kristi Pihl, Tri-City HeraldApril 10, 2012 

Mike Zook didn't spend a dime in fees to save his Pasco home when he got behind on mortgage payments.

After he was hurt on the job and went on disability, Zook, 61, said the monthly payment of $1,100 became more than his monthly income.

Then he got connected with the nonprofit Consumer Credit Counseling Service of the Tri-Cities. That's where Yvonne Fengler, a housing counselor certified by U.S. Department of Housing and Urban Development (HUD), helped him refinance his mortgage to a lower interest rate and monthly payment.

State Attorney General Rob McKenna said services like those that helped Zook will get a boost from a $25 billion national mortgage settlement he helped negotiate with the nation's five largest lenders.

"There are few things worse than losing your home," McKenna said Monday in Kennewick while visiting Consumer Credit Counseling.

Washington will receive about $650 million from the settlement that was formalized Friday.

Most will go directly to families who had home loans with Bank of America, Wells Fargo & Co., JPMorgan Chase & Co., Citigroup or Ally Financial, formerly GMAC, for services such as home refinancing and principal reduction, McKenna said.

The $45 million will be used to help keep homeowners in their homes no matter what company holds their mortgage, he said.

Some of that money may help support the Washington Homeownership Information Hotline -- 1-877-894-HOME -- which connects borrowers who need help to nonprofits including Consumer Credit Counseling, which is part of Apprisen Financial Advocates, he said.

McKenna said his office is in the process of forming a commission of lawmakers and experts to decide which proposals from nonprofit agencies should be funded with the settlement.

"The No. 1 goal is to keep as many people still in their homes there," McKenna said.

The Tri-Cities is not insulated from the problem of home foreclosures. "The problem is here. It is local," said Laurie Tufford, the regional director of partnerships for Consumer Credit Counseling.

Last year, foreclosures were the fewest the Tri-Cities has seen in eight years, with 355 foreclosures in 2011 compared with 755 in 2010, according to a report by Benton-Franklin Title Co.

Fengler said that doesn't reflect all the homes in the process of foreclosure.

Aileen Eriksen, 38, still is in her Burbank house because of the help she received from Consumer Credit Counseling.

Eriksen said one of her sons became ill and needed surgery. And then she went through a divorce and lost her job as a paraeducator in the Columbia-Burbank School District because of budget cuts.

This fall, Eriksen was worried that she and her eight children, ages 7 months to 20 years, would become homeless.

Her home already was in foreclosure when she and her domestic partner, Christopher Hammock, went to Consumer Credit Counseling and met with Sandi Paradiso, a HUD certified housing counselor. Eriksen said Paradiso helped her get into a mediation program with Bank of America.

"It gave me such a peace of mind," Eriksen said.

Foreclosure proceedings halted, and attorneys from the Northwest Justice Project helped her work out a lower mortgage payment for a three-month trial period starting in May, Eriksen said. She's hoping the lower payment will become permanent. Now, she still is job hunting and may go back to school.

Fengler said she sees families whose incomes run the gamut make the decision to pay day-to-day expenses instead of their mortgage.

Families don't have to be low-income to receive help from Consumer Credit Counseling. Medical expenses or a divorce may have triggered financial problems.

For Zook, it started when the economy caused business to slow at his Pasco barbershop. So he closed and went to work at a North Dakota airbase cutting hair. There, Zook said, he fell and got hurt and now is on disability.

Fengler helped them submit their paperwork. "She just knows her job so well, it was really not a problem," he said.

Their mortgage payments dropped to $700 a month, and their back payments were included in the refinanced mortgage, he said. The interest was lowered, and if Zook and his wife, Lora, stay current on their payments, $1,000 will be taken off their principal each year for three years.

"It saved my home," he said.

Zook and his wife worked with Fengler on tightening their budget and adding some income. Zook said they took on a paper route for the Tri-City Herald, and Fengler said that was enough to help them stay in their home.

"We try to empower people to do it themselves," she said.

Saving someone's home isn't possible in every situation, Fengler said. But a counselor can help the family understand their options.

Most people wait too long before seeking help, she said. The sooner the family asks for help, the better.

McKenna said the key is having a qualified person advise a homeowner on their options. A HUD-certified housing counselor has to meet certain standards and is advocating for their client rather than running a business.

There are scammers out there who will charge a fee of several thousand dollars to supposedly help a homeowner stay in a home, he said.

That's why McKenna said borrowers should look to nonprofits like Consumer Credit Counseling that do not charge fees.

Counselors are helping about 25 families a month with housing issues, Tufford said.

For more information about the national settlement, including how to find out who qualifies for help, go to www.nationalmortgagesettlement.com/.

For more information about foreclosure help, go to www.dfi.wa.gov/.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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