Home > Gwinnett > Rick Badie / My Opinion > Archives > 2008 > January > 12 > Entry
DEL.ICIO.US“Housing counselors hopping in Gwinnett”
The Atlanta Journal-Constitution
The car broke down.
Then the water heater tanked.
Big-ticket items. Right around Christmas, no less.
The homeowners fell behind on the mortgage payments. So they turned to the Consumer Credit Counseling Service of Greater Atlanta. It’s been hopping lately. The agency just announced a hiring blitz to help handle the thousands of clients trying to save their homes.
In Gwinnett, CCCS has two locations. One handles local walk-in clients. The other is a call center of 60 counselors who work with clients with issues like the couple above from Massachusetts.
The housing market has hit tough times. People are losing homes and falling behind on payments. Reasons vary. Some homeowners, though, are victims of material excess. They signed on to legal but risky financial schemes. Then the mortgage rates reset. Their monthly payment ballooned. Trouble.
I sympathize with anyone who loses a home. One group tangled up in the foreclosure crisis gripes me, though. It’s those folk who bought more house than they could afford. And knew it.
What makes a married couple that earns $70,000 a year think they can swing payments on a $275,000 house? With no down payment? The lender, mortgage broker or whoever tells said couple that they “qualify” for that amount should be ashamed.
Last year, the CCCS held 23,000 counseling sessions aimed at accessing finances and helping people avoid foreclosure. Just this December, they handled 3,500, wrote Scott Scredon, the agency spokesman, in an e-mail.
“In 2006, we did 6,579 foreclosure prevention sessions,” he wrote. “The number of counseling sessions has increased significantly … since President Bush’s program to help people with subprime adjustable rate loans was announced Dec. 6.”
CCCS “housing counselors” speak to people from all over the country. Generally, homeowners who contact the nonprofit have missed at least one mortgage payment. Typically, they are 42 years old, with households of three. Gross annual income is about $38,000. Monthly net income is $2,900. The mortgage payment tops $1,500.
And they have thousands of dollars in credit card debt.
On Friday, I listened as Kevin Weekley, a CCCS counselor, talked by telephone to the Massachusetts couple. They have two house loans. One’s for $998; the other $262. They were trucking along just fine till the car and hot water tank conked out.
Weekley collected information about their net monthly income ($2,802) and expenses ($2,119). It’s a good thing, he tells the wife, they have a decent discretionary income. The mortgage holder will be more amenable to working out a payment plan for the past due amount.
In fact, she says they’d already been contacted about such a plan and awaited the details. The past due amount probably will be divided, Weekley tells her, then tacked onto future monthly payments for a certain period of time.
He tellls her to contact him before agreeing to anything, though. The plan has to be an amount the family can withstand.
The wife asks one final question at the end of the 45-minute call.
Could they lose their house for missing one payment?
“They don’t want your house,” Weekley explains.
“They want your money.”
Rick Badie’s column appears on Sundays, Tuesdays and Thursdays. Contact him at 770-263-3875 or e-mail rbadie@ajc.com.
Permalink | Comments (3) | Post your comment | Categories: Rick Badie
Comments
By Bruce Wicox
January 13, 2008 3:42 AM | Link to this
When I purchased my home it was right after the last President Bush left and President Clinton just got took office, the interest rate was low, a very low adjustable 3.5% per year government loan. Because the economy under President Clinton did so well so did the interest, but back then wages and interest grew together. It was tight at times handling a house in New York and the home I purchased here, but the banks and the Feds went through every penny and dime I had, I may have and what I would have , then and only then would they cut a check to purchase the house.
In the last few years it has become nothing more than a Flim-Flam operation between the developers, the real estate agents, the lenders and even the government. The Feds on one hand in a desperate attempt to keep the economy going lowered interest rates to the 1950’s level, while on the other hand made it harder to declare bankruptcy, if that doesn’t sound like a scam nothing does!
It is a shame what they did to the ones that dreamed the Great American Dream of owning ones own home. They took advantage of both young and old, the educated and maybe some that were not as educated, in other words any pigeon they could make money off of.
A service such as Consumer Credit Counseling Service should have to sign off to prevent any scam before it can take place. Before the dobbers come out and babble to the masses with masses of baffle about government intervention, this service would be more like a termite inspection.
This collapse of the building industry is a blessing in a way, hopefully it will limit the number of the developments the commissioners can approve, maybe our water supply will be able to catch up.
By Michael H. Smith
January 13, 2008 1:10 PM | Link to this
Now that many have received their wish to halt development, let us see how many of the promised blessing shall befall?
Oversupply in the housing market
Falling house prices, falling property values
Lost jobs, lost incomes
Lost tax revenues
Tighter credit
Yep, what we need is a moratorium on development to solve all the problems. Now if the anti-development crowd can figure out what to do with all those people that remain (heaven forbid they keep making babies, meanwhile) and how to stop all those people from coming into the area, while coming up with a ton of funding from out of nowhere to pay for the infrastructure needs and to clean up the after math of this collapse in three sectors of the economy, their ill fated theory of economics might surely rescue us?
It is going to be a mixed bag Mr. Badie and a very bad mix it shall be. Of course, like all gloomy clouds a silver lining will appear to some, due to the out flow of the many illegal aliens leaving who can no longer find work in the construction industry where so many of them are illegally employed.
Enter the federal government, act II.
Bail outs
Loan re-negotiations
Finally, a few long overdue lending regulations put into place, perhaps?
Federal economic stimulus packages (provided by barrowed money)
Not to worry, though, our grandchildren for many generations to come will be paying the bills we now are creating.
Back to square two: It’s the economy stupid, déjà vu.
Presidential candidates will now focus on the economy and so will Congress: No longer will it be the war in Iraq, the war on terror, illegal immigration, healthcare, energy, social security, education etc.
During which time those who entered into risky sub-prime financial situations will have to endure a mess partly of their own making, though in truth, totally their own fault. The buyer always has the option of saying no.
For credit counselors, retiring members of Congress, a lame duck President and retiring CEO’s of lending institutions life is good. Scam artists will probably fair pretty good as well. Not so sure the same can be said for the rest of us with no “Teddy Roosevelt Progressive Reformers” in sight to protect us, from us.
The Consumer Credit Counseling Service should be counseling the government.
By Tirrell
January 14, 2008 9:57 PM | Link to this
All people who call CCCS of Atlanta or the 995Hope line (an affiliate of CCCS) are in for a rude awakening if you are expecting a miracle. Yes, they are a valuable infrastructure in the community, but they are not the answers to all of your problems. Wake up people, if you purchased a house that you can not afford, speaking with a credit counselor is not going to make you afford the house. Be prepared to show your mortgage company that you have the financial capacity to afford your lifestyle, if not be prepared to go. Sorry to sound so harsh, but that is the reality of it. No the lender does not want your house, but if you can’t pay for it, you can’t stay in it. Wake up and smell the coffee. As a person who personally spoke with a credit counselor at CCCS of Atlanta, I was satisfied, but I still had to give up my house because I could not afford it. Harsh reality, but reality nonetheless.