Three Charlotte families, whose struggles to avoid foreclosure were shared Sunday in The Observer, are now getting help from Washington.
U.S. Sen. Kay Hagan's staff is looking into problems the three families have had trying to modify their mortgages and save their homes. Hagan, D-N.C., said in an interview Thursday that during her first year in office, her staff worked with more than 100 N.C. families facing foreclosure. About 75 percent are still in their homes, she said.
The foreclosure-prevention cases are a small but important part of her constituent services effort.
"Foreclosures affect whole neighborhoods, whole communities, not just the individual," she said. "Due to the economic environment we're in ... they're more than they've ever been."
Statewide, foreclosure filings jumped 17 percent last year; Mecklenburg County saw a 52 percent gain compared with a year earlier. Filings mark the start of foreclosures and many do not result in a home loss.
A year ago, the Obama Administration rolled out a $75 billion foreclosure-prevention program intended to slow the bruising pace of home losses. The program has been widely criticized, with much of the blame falling on lenders and mortgage servicers for being slow to respond.
Banks and other firms have scrambled to improve, but homeowners, lawyers and foreclosure-prevention counselors continue to complain of confusing requirements, repeatedly lost paperwork and poor customer service that create lengthy delays.
"We can't force anyone to approve a modification, but we can certainly contact regulators," Hagan said. "A bank has to respond to a regulator, so it's a good way to get information to a constituent when they haven't been able to do it on their own.
"A lot of the time, the issue is lack of paperwork or not getting in touch with the right person," she said. "That's something we can help with."
Other remarks from Hagan, edited for brevity and clarity.
Q: What does it say about a big federal foreclosure-prevention program when it takes a U.S. Senator's staff to get people through the process intended to help them?
It's probably due to the fact that we have so many people in this foreclosure situation. That's one reason I'm saying my office is open to help. We have a toll-free line: 877-852-9462.
Q: There's a debate about whether the government should be involved in widespread foreclosure prevention. What do you think?
Home ownership is one of the basic building blocks of (personal) equity. I want to do everything possible to keep people in their homes. A government can help citizens in these very vulnerable times.
Q: One factor driving the foreclosure crisis has been exotic loans, often with spiraling interest rates, that borrowers didn't understand. The first bill you proposed in the U.S. Senate deals with financial literacy education. What would it do?
This bill offers funding for states to put forward (financial literacy) curriculum in grades 6 through 12 that would teach our students about borrowing, credit cards, loans, accessing your credit score - teaching young people the skill sets necessary in this world. This is critical.