Community Spotlight
Housing Education Program: Fighting the Foreclosure Crisis One Family at a Time
by Emily Landes
In offices high above downtown San Francisco, counselors for the Consumer Credit Counseling Service’s Housing Education Program help family after family on the verge of losing their homes. Some have been unable to keep up with payments after a job loss or illness; others were left struggling when their initial low payments reset; a few probably shouldn’t have been allowed to take out a loan back during the heady boom market. No matter what the individual situation may be, Housing Education Program Founder Rick Harper has the same message: don’t give up your home without a fight.
It’s a message of hope that many home-owners could use right now and one that he’s been giving out since 1995, when the education program became the first HUD-approved counseling agency in San Francisco. “It’s almost like getting the Good Housekeeping Seal of Approval,” he says of the designation. From the very beginning, his counselors have been dealing with families at risk for foreclosure. But at that time, staff might have handled a handful of foreclosure preventions every month. In late 2004, he noticed the numbers were starting to tick up. Today, counselors handle 100 preventions every month and get about 400 phone calls from all over the country every day, courtesy of the program’s association with the Housing Preservation Foundation’s Homeowner’s Hope Hotline (888-995-HOPE).
With a high volume of high-stress clients, it’s no wonder the counselors get the window offices with the soothing views of downtown, while managers like Harper sit in interior spaces. Counselor burnout is a very real problem for the program, especially as the foreclosure rate shows no signs of letting up, the founder admits. “They are dealing with crisis situations one after the other,” he says of his staff. “When you get one story after the other, you have to be in control, empathetic and a good listener, so that you can get right to the crux of the problem.”
That means keeping morale up, not just with good views, but by sharing stories of success—and there are plenty, Harper confirms. “The lending community as a whole, because of the epidemic, is much more attuned to the situation and willing to listen than they were five years ago,” he says. Of those who are able to get a loan modification, he estimates about half are successful in keeping their homes. Plus, the earlier in the foreclosure process families begin seeking help, the more successful they are likely to be. “Every month that goes by, every week that goes by, it’s just a little more difficult,” he adds.
But even families who have missed multiple payments have a chance to save their homes. In fact, even houses on the verge of a bank sale can sometimes be pulled out of foreclosure. “It doesn’t matter how much you’re behind,” Harper explains. “If you want to stay in that house, let’s sit down, roll up our sleeves and see what we can do because we’ve had a lot of success.” One of the biggest issues counselors contend with is people who simply give up as soon as they get the first notice of a missed payment. Half of all families in foreclosure are termed “no contact families”: due to a mix of embarrassment and pessimism, they simply never respond to any notices about the impending foreclosure and just wait for the bank to take possession of the home.
Harper blames that embarrassment factor for keeping people away from the program’s free foreclosure workshops. In the last year, the organization has held two such workshops; both were a complete bust and Harper has a pretty good idea why. “Calling on the phone is one thing, but walking into a room—everyone’s going to know why you’re there,” he says.
At the same time, the organization has so much interest in its free first-time home-owner workshops that, for the first time in its history, it has had to turn people away. Harper believes this high turnout speaks to the deep desires Americans have to be homeowners, regardless of what the market might be doing. Another reason for the popularity of the courses is that the Mayor’s Office of Housing has begun requiring them in order to qualify for the affordable housing lottery.
In Harper’s mind, a lot of the current problems in the housing sector could have been solved if there was a similar requirement for every potential owner. “People would not have overbought if they really understood what the risks were,” he posits. He believes that because homebuying is such a complex process, people have been far too trusting in allowing brokers or realtors to determine their loan terms. That trust could lead to unfavorable terms, or it could mean taking on more debt than the family can really afford. “When people are paying big bucks when someone signs on the bottom line, that trust issue gets distorted,” he observes. When borrowers begin missing payments in their first year of the homeownership, that’s a pretty clear sign that they probably couldn’t afford the loan to begin with, he adds.
But part of the message that Harper imparts to thousands of anxious, but hopeful, soon-to-be homeowners is that, with the right information, those kinds of mistakes can absolutely be avoided: “I told people in my class, ‘All this crap you’re reading in the paper today, it’s not going to happen to you, because you’re sitting here. You’re going to ask questions. You’re gonna know. Life happens and divorce happens and illness happens. Those reasons, we can’t foresee. But overbuying, no, it’s not going to happen to you.’ Education, I believe, is the key.”
Also key are new regulations to create more transparency and greater lender responsibility in the process, he argues. “There’s no reason why it should be so confusing. You should be quoted a rate and a total of charges and that’s it,” Harper says. He believes that if the originating lender were more responsible for future loan defaults, there’s no way the country would be in the situation it’s in now. There would have been more checks and balances from the beginning, rather than a call for increased regulation after the fact.
Harper firmly believes that those new regulations are coming, along with real changes “all the way up the ladder.” He concedes that no one likes regulation excess, but that we’re currently living with the results of too little regulation. For some, those results may just be facts and figures bandied about in newspaper articles and on the Senate floor, but for Harper and his hardworking staff, they are the real families that come by the hundreds every day, looking for hope and a way to keep their piece of the American Dream.
The opinions expressed in this article are those of the author, and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Emily Landes is the managing editor of SF Apartment Magazine. Copyright © 2008 by Black Point Press. All rights reserved.