NC fund has rescued homeowners from foreclosure

Shortly after getting the news last May that she was being laid off from her job at LipoScience after 13 years, Angela Devone, immediately thought about her home that she purchased a year earlier. How was she going to maintain the monthly payment?

“The first thing I did was call my mortgage company,” said Devone, who lives in Clayton with her two sons.

That’s when she learned about the N.C. Foreclosure Prevention Fund. She was told that if she qualified, the program would pay her mortgage for up to 36 months or up to $36,000 while she looked for a new job. But Devone was doubtful.

“I remembered seeing a commercial about it once, but it went in one ear and out the other,” she said. “I am a skeptic. If it sounds too good to be true, then something is not right.” But with no other options, Devone contacted her local Housing and Urban Development-approved Housing Counseling Agency and applied for the program. After completing all the paper work and providing the required documents, she was approved.

Devone joined the ranks of nearly 20,000 families across North Carolina whose homes have been preserved by the state’s foreclosure prevention since 2010. The program was created and is managed by the N.C. Housing Finance Agency, a self-supporting state agency, using funds from the U.S. Department of the Treasury’s Hardest Hit Fund. The fund offers a Mortgage Payment Program to North Carolina homeowners who are struggling to make their mortgage payment after losing a job through no fault of their own, or who are experiencing a temporary hardship such as a divorce, serious illness or the death of a co-signer that requires them to seek new employment.

In addition to having kept 19,700 families in their homes, the program touts that it has preserved $3.5 billion in home equity – which includes the value of the homes kept out of foreclosure and the home equity of neighboring homes which can be affected adversely by foreclosed properties.

“This has had a broad impact on our neighborhoods and local communities,” said Bob Kucab, Executive Director of the N.C. Housing Finance Agency. “It has exceeded our expectations.”

Fewer foreclosures

The program owes its success in large part to the strong teamwork among a number of government agencies and business leaders, Kucab said. The group included the state clerks of court, mortgage servicers, foreclosure attorneys, and the N.C. Office of the Commissioner of Banks.

The agency has until December 2017 to exhaust all of the funds in the program. Kucab would not say how much remains, but he said that based off of past trends, the agency anticipates it will be able to assist at least 2,000 additional families. In an effort to reach as many people as possible, last year, the agency expanded the program to include veterans who are enrolled in school under the GI Bill.

“The changes in the economy has affected people in very different ways,” said Kucab.

Residents can get help by visiting one of the HUD-approved counseling agencies that are located statewide. The staff at these centers assist people through the entire process.

“It was no worse than applying for a home,” said Devone. “They gave me a checklist of what to bring in and it didn’t take long. … I began the process in August and was approved in October.

“It has been a blessing to not have to worry about overhead with a mortgage. It’s my biggest expense.”

The mortgage on her 3-bedroom, two-story home is $1,010.14 a month.

The program even covered the increased escrow payments after she was notified by the bank that her fees were going up. “I asked them and they said yes.” Devone said she is certain that she would have lost her home without the program. “There are no ifs, ands or buts about it, I would not be in my home today.”

Kucab said the program has had a direct impact on decreasing the state’s foreclosure rate. As of April 30, 10,254 foreclosure notices had been filed. At this rate, there will be approximately 41,000 foreclosures filed across the state this year – a 38 percent reduction from the 66,276 filed during the state’s peak in 2010.

According to one of Raleigh’s housing counseling agencies, it has been able to assist the majority of people who have applied for the MPP. The Raleigh Area Development Authority has processed 1,508 applications since 2010. Of those, 838 – or 56 percent – resulted in closed MPP loans.

Worries for the future

Devone, 54, has spent the past year working on becoming a certified nursing assistant and phlebotomist at Care One Health Training Institute and looking for work in her new medical field. In May, she started a part-time job at WakeMed but she worries about finding full-time work before her participation in the program ends.

“It’s in the back of my head,” she said. “I’m coming into a new career at the bottom of the totem pole.”

She said that if she doesn’t have her desired job by October, she will have to make a decision about whether she will keep the house. “We’ll see. I always like to be thinking ahead and not be blindsided,” she said.

If she does end up having to sell her home, the repayment terms will be negotiated based on her individual circumstances. Loans do not have to be repaid if the home owner lives in the home for at least 10 years.

Wallace Green, president of Raleigh Area Development Authority, said he worries what will happen after the funds are exhausted and the program ends.

Kucab agreed, saying: “We have a little time left and there are many Americans still facing crisis.”

This story was originally published July 5, 2015 at 2:00 AM with the headline "NC fund has rescued homeowners from foreclosure."