Thousands of homeowners in the San Joaquin Valley facing possible foreclosure of their houses could benefit from a free workshop Wednesday in Stockton.
The Central Valley is the 10th stop in a nationwide campaign by President Barack Obama's 5-month-old Making Home Affordable Program. The goal is to help stabilize the housing market and to help families reduce their mortgages.
There have been complaints that lenders have been slow to respond to the program, but industry spokeswoman Beth Mills said banks have been gearing up to meet the overwhelming demand.
Wells Fargo, for example, hired and trained 4,000 counselors in the first half of 2009. "Banks have been overwhelmed by calls coming in," said Mills, a representative of the California Mortgage Bankers Association.
After much criticism, it appears that more people are getting help.
"We're finally seeing modifications coming out of the other end of the pipeline," said Martha Lucey, Fresno-based president of the Pacific Region of ClearPoint Credit Counseling Solutions. "There is an increased number of loans being modified."
More lenders are reducing interest rates or refinancing loans for less than the full amount, Lucey said. "It has been a long time coming, and we are pleased that for whatever reason modifications are coming through."
Her agency is sending two counselors to the workshop. Wells Fargo/Wachovia, GMAC, American Home Mortgage Servicing, Indymac Mortgage Services, Ocwen, Bank of America and Chase will be among the lenders represented.
Families who have defaulted or might default on loans are encouraged to attend the workshop. They can seek help from credit counselors and meet bank representatives who can start modifying their loans on the spot, said Alvina McHale, homeownership prevention officer at the Department of Treasury.
Many families could benefit. In Fresno County alone, 11,320 households are in some stage of foreclosure, according to RealtyTrac, which monitors default activity.
Stockton was selected to host the workshop because the northern San Joaquin Valley is the epicenter of foreclosures. Stockton, Merced and Modesto consistently lead the nation in defaults.
McHale said homeowners should bring loan documents, their last two paycheck stubs, tax return and any information on car loans and outstanding debt.
The objective is to bring down mortgage payments to 31% of household income. Even if that isn't possible, McHale suggested that at-risk borrowers attend the workshop anyway.
"Regardless of your situation, you need to come to the table," she said, acknowledging that not everyone -- especially those who are unemployed or don't occupy the property -- will be able to save their homes.
"It really is a question of looking at all the options," she said.
McHale said Obama's program continues to evolve in an attempt to help more families. Among the considerations: streamlining short sales, where banks negotiate a deal with the owner before the house goes to foreclosure.
Still, many homeowners are choosing simply to walk away from the house rather than modify their loans. "Banks have a willingness," Mills said, "and borrowers need to have a willingness, too."
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