With the number of foreclosures soaring in San Mateo County — and across the country — the Board of Supervisors hopes to buy time for families threatened by the loss of their homes.
On Oct. 30, the board unanimously adopted a resolution urging subprime mortgage lenders, and businesses that service the loans, to voluntarily suspend for three months foreclosures on owner-occupied homes.
During that time, the resolution calls on lenders and agencies that service loans to reach out and help their customers remain in their homes. It suggests they modify loans by reducing the interest rate and/or the principle to achieve affordable payments. It also asks them to work with the county and community-based organizations to reach homeowners who are out of communication, for whatever reason.
“Subprime loans have turned dreams of home ownership into nightmares,” said Board President Rose Jacobs Gibson. She urged people on the brink — who are often seniors, or people of color, or people who speak another language — to use the three-month window to talk to lenders and housing agencies “without the clock ticking on foreclosures.”
Defaults and foreclosures are drastically up throughout California, according to third-quarter reports by DataQuick Information Systems. In San Mateo County, notices of default doubled, from 290 to 581, during the July-through-September quarter, compared with the same period a year ago.
Actual foreclosures more than quadrupled during that same third quarter, from 37 in 2006 to 155 in 2007, according to an Oct. 26 press release.
“The foreclosure epidemic has significantly and negatively impacted home ownership in San Mateo County,” said Ms. Jacobs Gibson. “It will continue to do so unless lenders work with homeowners to refinance loans, or work out reasonable payment plans that will keep families in their homes.”
Subprime mess
The county resolution spells out the devastating effects of high-risk “subprime” mortgages aggressively peddled to buyers who couldn’t qualify for regular loans. Many of these loans have interest rates that start increasing after two years and carry penalties for pre-payment. Many rely on misstated income. Some were negotiated in another language but issued in English, the resolution says.
“The targets of these loans were often our most vulnerable residents,, such as working families in minority communities, and the elderly,” the resolution states.
A dozen members of the community group ACORN, sporting red T-shirts, attended the hearing in support of the resolution. Estela Baldovinos, a South San Francisco mother of nine, told the board her mortgage payment started at $2,700 a month at 6.5 percent; after two years, she’s supposed to pay $8,200 at 12.2 percent. “They lied to me,” she said.
“We should get past blame,” said Supervisor Marvin Church. “It’s destroying lives. It’s destroying families, and we need to encourage lenders to reach out to these people who are affected.”
For help
A flier from Supervisor Jacobs Gibson’s office offers suggestions for people facing foreclosure:
• Contact your lender as soon as you have a problem. Maybe you can work out a solution.
• Beware of foreclosure recovery scams. If a firm contacts you to help negotiate, it could be a legitimate business, or it could be a scam — especially if the caller charges a hefty fee. The information should be free.
• Speak with a housing counselor. The federal Department of Housing and Urban Development (HUD) provides funding for free or low-cost housing counselors, who can explain options and represent people with lenders.
INFORMATION
For information or help call HUD at 800-569-4287. Or contact Supervisor Rose Jacobs Gibson’s office at 363-4570 or by e-mail: RoseJG@co.sanmateo.ca.us.
