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Homeowner: 'I don't see any hope'
By MARK HAYWARD
New Hampshire Union Leader
17 hours, 17 minutes ago
LAST YEAR, Jessica Dery found time between her job and caring for her three children to pass out brochures and put up lawn signs for presidential candidate Barack Obama.
If she's putting up any lawn signs this year, however, it will be a for-sale sign in front of the Manchester house she has owned for four years. Behind 2 1/2 months on her mortgage and short $1,500 in her escrow account, Dery has received a notice of default from St. Mary's Bank. She figures she will have to sell or face foreclosure.
"I don't see any hope. I've lost all hope," said Dery, who does not qualify for the mortgage relief programs established this year by President Obama and Congress. "His passion and desire, it seemed to be a help to real people who were legitimately trying. I don't see any of that. All I see is cutbacks."
As it turns out, federal programs designed to help financially troubled homeowners are not reaching people such as Dery
Affordable program, which writes down mortgage interest rates to 2 percent for qualified participants -- is designed to rescue troubled home buyers who used the sub-prime market, said Dean J. Christon, executive director of the New Hampshire Housing Finance Authority.
There is little solid help for moderate-income people such as Dery, who avoided no-doc loans and so-called "liar loans" and opted for home-ownership classes and conventional mortgages.
"There are a lot of people hurt by this economy who did everything right," Christon said.
'It's not working'
Robert Tourigny, executive director of NeighborWorks Greater Manchester, said the biggest problem he sees is homeowners whose mortgages aren't owned by Fannie Mae or Freddie Mac, the mortgage companies the government took over last year.
Only mortgages owned by Fannie Mae or Freddie Mac are eligible for modifications that could lower mortgage rates to as little as 2 percent. Earlier this month, the Treasury Department reported that only 9 percent of eligible borrowers had seen their mortgages modified and payments reduced.
"It's not working," said Tourigny, whose agency holds the second mortgage on Dery's property.
He said organizations such as his and New Hampshire Housing Finance Authority didn't write risky loans, as did Fannie Mae and Freddie Mac. But risky loans collapsed the market, which hurt everyone.
$1,500 monthly payment
Dery, who is 32, is the mother of three children, 13, 11 and 8. Her long-term partner lives with her, but is on disability. Although she has a master's degree in social work, she earns only $36,000 a year.
In 2005, she bought the house at 733 Mammoth Road for $190,000. Both Dery and her mother signed the mortgage.
They used an 80-20 loan, which allowed them to avoid paying mortgage insurance. St. Mary's Bank holds the primary mortgage, NeighborWorks Greater Manchester holds the second mortgage.
Jessica Dery spends some time in her Manchester backyard as her children play basketball. (BRUCE PRESTON)
For two years, they made their payments, she said. But her mother moved out in 2007, and Dery had to change jobs and take a pay cut. Car and medical bills ate into her budget. And her tax bill rose $2,200 when she lost some of the disability exemption for her property.
Dery said St. Mary's modified her loan once: pushing two missed payments to the end of the 30-year term. Her mother moved back two months ago, but only contributes $300 a month. Her partner's disability amounts to $600 a month, and he spends that on a car payment, cell phone and credit card bills.
With the new tax bill, her monthly payment is about $1,500, she said; Dery said she can't afford it.
Last year, Dery said, she was told to wait until Obama was in office, and she would be a prime candidate for help. But now hotline operators tell her she's at the mercy of her lender because her mortgage is not with Fannie Mae or Freddie Mac.
"These programs aren't helping families. These programs aren't helping children from being homeless," she said.
No Band-Aids
St. Mary's Bank officials said they cannot speak about a member's situation. But the credit union did answer questions about loan modifications in general.
It has modified six loans whose borrowers are eligible for the Making Home Affordable program, reducing payments by $100 to $300 a month for borrowers. The bank is also modifying other mortgages that fall outside the program by reducing interest rates, extending terms and capitalizing interest payments, the credit union said in response to submitted questions.
The modifications have been "very successful" in general, the bank said.
But at times, a modification won't work, the bank said. A member's income may have dropped, utilities or taxes may have increased, substantial repairs may be needed or a tenant may have moved out.
Some people just need to come to the realization that they can't afford their home, said Barbara Cunningham, vice president and mortgage origination manager for St. Mary's Bank.
"Like anything else, it has to be a modification that works for the long term," she said. "It can't be a Band-Aid where surgery is needed."
Who's getting help?
It's uncertain how many New Hampshire homeowners are benefiting from the Making Home Affordable program.
Christon said he's heard anecdotally that some New Hampshire mortgages are being modified with the 2 percent interest rate. But he said a bank can decline a qualifying homeowner if the bank believes a modification would cost more than a foreclosure.
He said the modification would be more helpful in states such as California and Florida, which have seen significant drops in home values, than in New Hampshire.
New Hampshire Housing Finance Authority does not participate in the program because it would harm the organization's ability to make payments it owes to lenders, Christon said.
This month, the Treasury Department said of the 2.7 million mortgages deemed eligible for modification, only 9 percent have signed up for it. A spokesman for the Making Home Affordable program said state-by-state breakdowns were not available
By MARK HAYWARD
New Hampshire Union Leader
17 hours, 17 minutes ago
LAST YEAR, Jessica Dery found time between her job and caring for her three children to pass out brochures and put up lawn signs for presidential candidate Barack Obama.
If she's putting up any lawn signs this year, however, it will be a for-sale sign in front of the Manchester house she has owned for four years. Behind 2 1/2 months on her mortgage and short $1,500 in her escrow account, Dery has received a notice of default from St. Mary's Bank. She figures she will have to sell or face foreclosure.
"I don't see any hope. I've lost all hope," said Dery, who does not qualify for the mortgage relief programs established this year by President Obama and Congress. "His passion and desire, it seemed to be a help to real people who were legitimately trying. I don't see any of that. All I see is cutbacks."
As it turns out, federal programs designed to help financially troubled homeowners are not reaching people such as Dery
Affordable program, which writes down mortgage interest rates to 2 percent for qualified participants -- is designed to rescue troubled home buyers who used the sub-prime market, said Dean J. Christon, executive director of the New Hampshire Housing Finance Authority.
There is little solid help for moderate-income people such as Dery, who avoided no-doc loans and so-called "liar loans" and opted for home-ownership classes and conventional mortgages.
"There are a lot of people hurt by this economy who did everything right," Christon said.
'It's not working'
Robert Tourigny, executive director of NeighborWorks Greater Manchester, said the biggest problem he sees is homeowners whose mortgages aren't owned by Fannie Mae or Freddie Mac, the mortgage companies the government took over last year.
Only mortgages owned by Fannie Mae or Freddie Mac are eligible for modifications that could lower mortgage rates to as little as 2 percent. Earlier this month, the Treasury Department reported that only 9 percent of eligible borrowers had seen their mortgages modified and payments reduced.
"It's not working," said Tourigny, whose agency holds the second mortgage on Dery's property.
He said organizations such as his and New Hampshire Housing Finance Authority didn't write risky loans, as did Fannie Mae and Freddie Mac. But risky loans collapsed the market, which hurt everyone.
$1,500 monthly payment
Dery, who is 32, is the mother of three children, 13, 11 and 8. Her long-term partner lives with her, but is on disability. Although she has a master's degree in social work, she earns only $36,000 a year.
In 2005, she bought the house at 733 Mammoth Road for $190,000. Both Dery and her mother signed the mortgage.
They used an 80-20 loan, which allowed them to avoid paying mortgage insurance. St. Mary's Bank holds the primary mortgage, NeighborWorks Greater Manchester holds the second mortgage.
Jessica Dery spends some time in her Manchester backyard as her children play basketball. (BRUCE PRESTON)
For two years, they made their payments, she said. But her mother moved out in 2007, and Dery had to change jobs and take a pay cut. Car and medical bills ate into her budget. And her tax bill rose $2,200 when she lost some of the disability exemption for her property.
Dery said St. Mary's modified her loan once: pushing two missed payments to the end of the 30-year term. Her mother moved back two months ago, but only contributes $300 a month. Her partner's disability amounts to $600 a month, and he spends that on a car payment, cell phone and credit card bills.
With the new tax bill, her monthly payment is about $1,500, she said; Dery said she can't afford it.
Last year, Dery said, she was told to wait until Obama was in office, and she would be a prime candidate for help. But now hotline operators tell her she's at the mercy of her lender because her mortgage is not with Fannie Mae or Freddie Mac.
"These programs aren't helping families. These programs aren't helping children from being homeless," she said.
No Band-Aids
St. Mary's Bank officials said they cannot speak about a member's situation. But the credit union did answer questions about loan modifications in general.
It has modified six loans whose borrowers are eligible for the Making Home Affordable program, reducing payments by $100 to $300 a month for borrowers. The bank is also modifying other mortgages that fall outside the program by reducing interest rates, extending terms and capitalizing interest payments, the credit union said in response to submitted questions.
The modifications have been "very successful" in general, the bank said.
But at times, a modification won't work, the bank said. A member's income may have dropped, utilities or taxes may have increased, substantial repairs may be needed or a tenant may have moved out.
Some people just need to come to the realization that they can't afford their home, said Barbara Cunningham, vice president and mortgage origination manager for St. Mary's Bank.
"Like anything else, it has to be a modification that works for the long term," she said. "It can't be a Band-Aid where surgery is needed."
Who's getting help?
It's uncertain how many New Hampshire homeowners are benefiting from the Making Home Affordable program.
Christon said he's heard anecdotally that some New Hampshire mortgages are being modified with the 2 percent interest rate. But he said a bank can decline a qualifying homeowner if the bank believes a modification would cost more than a foreclosure.
He said the modification would be more helpful in states such as California and Florida, which have seen significant drops in home values, than in New Hampshire.
New Hampshire Housing Finance Authority does not participate in the program because it would harm the organization's ability to make payments it owes to lenders, Christon said.
This month, the Treasury Department said of the 2.7 million mortgages deemed eligible for modification, only 9 percent have signed up for it. A spokesman for the Making Home Affordable program said state-by-state breakdowns were not available
