Groups may help save homes: homeowners could prevent foreclosures with consortium's aid

July 17, 2012
by Jeff Ayres

Hundreds of Mississippi homeowners could escape foreclosure with the help of the state's partnership with nonprofits and with the companies blamed for creating the nation's mortgage crisis footing the bill.

The Mississippi Foreclosure Prevention Consortium, announced Monday, will offer free financial and legal counseling to those facing foreclosure.

The three-year effort is being funded by $5.8 million from Mississippi's portion of a $25 billion national settlement between states and some of the country's biggest mortgage service companies, including JPMorgan Chase, Wells Fargo, Citigroup and Bank of America. The state is receiving almost $13.6 million from the settlement.

The states accused the companies and other firms of foreclosure fraud and deceptive business practices.

The lenders that were part of the nationwide settlement have "thousands of loans" in Mississippi, said Ben Mokry, executive vice president of research and development with Mississippi Home Corporation.

No one on hand for Monday's announcement could say exactly how many Mississippians might take part. But based on foreclosure filings in Mississippi, there's a great need.

The state tallied 418 foreclosure filings in June 2012 alone, representing one in every 3,050 homes, according to RealtyTrac, a foreclosure-rate website. In Hinds County, that ratio was one in every 1,724 homes.

Maj. Gen. Cathy Lutz says she's alarmed at the skyrocketing suicide rate of military men and women nationally in the last 10 years.

While most military suicides stem from eroding personal relationships, financial stresses like the prospect of losing a home no doubt play a role, the commander of the Mississippi Air National Guard says.

While the exact number of active military members facing foreclosure in Mississippi isn't known, Lutz says there's no shortage of need.

"They have to deal with the economy, like everyone else," she said. "You need to make sure you have a secure job. You need to pay your bills. It's an adjustment," especially for those returning from overseas.

The consortium features a toll-free hotline as an initial point of contact that can refer callers to the agency that can best address their problems.

Consortium members include Money Management International, Mississippi Home Corporation, Mississippi Center for Justice, Mississippi Center for Legal Services, North Mississippi Rural Legal Services and the Mississippi Military Department.

"They're the ones who told us where the problems are. They're the ones on the ground," said Attorney General Jim Hood.

While the partnership stems from the legal settlement, those who use the consortium don't have to have been a customer of one of the firms in question, Hood said.

A number of states have created similar initiatives, but members of Mississippi's group say it's unique because it includes both general homeowner counseling, to be led by MHC, and legal services.

Beth Orlansky, advocacy director for the Mississippi Center for Justice, says her nonprofit has given legal assistance to "several hundred" people facing foreclosure in the last four years without the cases having to be decided by a judge.

Each state received a certain amount of money to use toward foreclosure prevention programs but was left with leeway in deciding exactly how much to spend.

The remaining $7.7 million of Mississippi's foreclosure-prevention money will go into the state's general fund.

Hood said state officials determined spending $5.8 million to create the consortium would be enough to create a successful program, since foreclosures aren't as rampant in Mississippi as elsewhere and don't require a greater financial investment for prevention.

California, for instance, had 47,490 new foreclosure filings in June, according to RealtyTrac, or one in every 288 homes.