Fighting the housing crisis in Texas

Although Houston doesn’t face the housing crisis at the grave level that’s been witnessed through the country, local authorities are constantly trying to reduce its impact to help people like Irene Stevens.
Stevens, a woman in her 40s, bought a home more than four years ago and in January 2008 she found herself in trouble paying the monthly due on her property.

“In part, it was my fault for not reading all the information about fixed and adjustable rate when I bought my home and my loan officer didn’t explain the process very well,” Stevens said, who couldn’t make mortgage payments on her house when the interest rate rose to an alarming level.

In recent years, the typical agreement in real estate transactions with uninformed home buyers was an obvious, confortable choice. They chose an adjustable rate where they commit themselves to a steady lower amount for two years and then it would increase later depending on the market’s flow.

The African American woman from Houston started paying an interest rate around seven percent in 2005 y in September 2007, it increased two points close to ten percent. Without the Homeownership Preservation Foundation‘s assistance, the rate for Stevens would have grown to more than 13 percent by mid 2008, at about $600 more per month.

“I called the program’s hotline and they told me I qualified for a new mortgage contract arrangement,” Stevens said.

She then called the lender but was told repeatedly she didn’t qualify for a any new adjustments. After HPF representatives called the bank in her behalf, things changed to her benefit by the end of summer.

“People from the bank called me the next day to give me a better arrangement with my home loan and I realized that folks need people who know about these things to solve the problems,” Stevens said.

Help is here

HPF has support from financial groups like Money Management International (MMI) to help homeowners like Mrs. Stevens.

“We work with advisers in housing and urban development to take calls from people about to lose their home to take them through a counseling process and an analysis of the situation plus we get in touch with the lender to solve the problem,” said MMI Housing Counseling Department Manager Yolanda Ames.

The HPF program was created years before the mortgage crisis began and was organized by investors and industry professionals that were concerned about a possible crisis in the real estate market.

During a formal announcement in City Hall, Mayor Bill White announced in April 2008 the creation of Texas Foreclosure Prevention Task Force (TFPTF) with the collaboration of Michael Gerber, Executive Director for the Texas Department of Housing of Community Affairs (TDHCA) and other local officials.

“The organization’s goal is to reverse foreclosure of homes and the negative impact on Texan families,” said White who acknowledged there should be an established mechanism to prevent future problems in the local economy.

As a TFPTF supporter, U.S. Congressman Al Green (D-TX) is another local leader who has worked continuously with legislation and has promoted homeowner workshops and information forums to discuss solutions to the industry’s crisis.

“We must not forget that foreclosures negatively impact our nation on every level,” Green said. “They cause families to lose their homes, tenants to have to relocate and cities to lose valuable tax revenue, making it harder to provide good schools, police protection, code enforcement and other vital services."

Community organizations like Association of Community Organizations for Reform Now (ACORN) are also working with the people who are at risk of losing their homes and the group also offers classes on foreclosure prevention every week as part of the TFPTF.

“It’s very important that people act, not to paralyze themselves and to get in contact with specialists who can help them keep ownership of their homes,” said Rafael Medrano with Keychain Alliance of GMAC, who emphasized that program counselors have to be  certified by Housing and Urban Development (HUD).

Medrano added that lenders, especially large financial institutions or banks like Wells Fargo and Bank of America, are more interested in solving the problem and getting mortgage payments than collecting a large inventory of properties.

Previously published on www.examiner.com