Working with CCO – Communities Creating Opportunity – St. Therese sponsored an event on Tuesday to help people avoid mortgage foreclosure. Our neighborhood was targeted by sub-prime lenders and now our neighbors are paying the price. Representatives of neighborhood housing groups sent counselors that gave everyone an opportunity to discuss their situation in person. Countrywide/Bank of American sent mortgage adjustors to meet with people about restructuring their mortgages to try to save their homes. Volunteers from St. Therese and other churches provided hospitality so that people were welcomed warmly and treated humanely. We gave about thirty five people a chance to save their homes.

For two hours I met with those who had completed the process and had talked with a counselor and adjustor.

Everybody was very pleased and their emotional responses ranged from demonstrative thanks to tears of gratitude. But that does not please me.

They were so grateful because they finally had the opportunity to meet a representative from their lender who had the ability to at least delay a foreclosure while refinancing options were explored. It shouldn’t take churches planning events like this to make it possible for people to get action from their lenders.

Several people told me they had been calling and speaking with people at Countrywide over and over again. These homeowners were motivated and were trying to do the right thing. They were not ignoring the problem. But they were literally weeks from losing their homes because they could not make contact with anyone who had authority to work with them. At our event they were able to meet with somebody.

The bad news is: this tells me there are thousands of people trying to work through their problems, but they will end up losing their homes because the mortgage companies do not have systems in place to make authoritative decisions. There are millions who have given up trying. Our event may have been very good public relations for the lender because they flew adjustors into Kansas City to meet with a few people in danger of foreclosure. But that's not what people need. People need a process so that anybody anywhere can get a chance to work out their mortgage problems with a loan agent who has authority to act.

Here's the other thing that makes me angry. The only adjustments that people were offered were the old conservative modifications. Half of them will will be in foreclosure again in six months. People were offered the opportunity to fold their overdue payments back into their loans or pay them on the tail end. Some, who had high ARMs, were offered the possibility of lower fixed interest rates. But nobody was offered the possibility of having the amount of their mortgage reduced to reflect the current market value of their homes, and nobody was offered any debt forgiveness. The only offers made by the lender were variations of the theme “Pay up or get out.” Already some of the blocks in our neighborhood are half vacant, for sale, or bank-owned. None of the $700 billion bail-out money showed up here for the people who took part in our program. They walked out of here with just as much debt as they came in with, and almost always their new payments were just as high or even higher than before. If they were “upside down” on their loans when they came in, they were upside down when they left. If they couldn't manage before they came in, they might have been able to get their foreclosure put on a temporary hold, but nobody got their real problem fixed.

I think we can be proud of ourselves that the event showed compassion and that so many volunteers were involved. I am pleased that people had the chance to meet with a counselor and a loan modifier. But I don't think the lenders did us a favor. The report of the event on the news sounded like we are naïve do-gooders doing nice things to get people to pick up the phone and talk to the nice mortgage people who are standing by ready to help them get their situations straightened out. The news made it sound like the mortgage problem can be solved by garage sales and baby sitting.

If the millions of parishioners and neighbors who are in danger of losing their homes are to have any hope of getting their mortgages adjusted in a way that will give them a reasonable chance to keep their homes, then we will have to have a nationwide mandatory strategy. People will have to know that when they make an effort to work with their lenders, they will be able to contact someone who can take some action. Lenders will have to be motivated to work with large numbers of people. And everyone needs to know what methods can be used to reduce amounts of loans and amounts of payments. Without that, there is no accountability. While we are waiting for a nationwide mandatory program, thousands of families will be put out of their homes this week. And it will continue next week. And the week after that.