Federal Funds to Help Families Facing Foreclosures
FORECLOSURES
Worcester Telegram & Gazette
Jason Millman
Boston University Washington News Service
Feb. 26, 2008
WASHINGTON – Nineteen different Massachusetts financial counseling groups will receive federal funds to help combat the growing foreclosure crisis, congressmen announced Tuesday.
Overall 143 such organizations across the country in the areas with the highest risk for foreclosures will receive $130 million in grants that were approved in December. The grants will fund sessions between housing counseling agencies and home owners who are in foreclosure or who are at risk of foreclosure. About 500,000 counseling sessions are being funded in the country, with 15,000 of those in Massachusetts. The problem is particularly keen in Massachusetts, where foreclosure deeds more than doubled from 2006 to 2007.
U.S. Rep. John W. Olver, D-Amherst, chairman of the House subcommittee that arranged the funding, said it is impossible as of now to predict how much will go toward each Massachusetts agency.
“It’s all dependent upon where the greatest need is, where the greatest risk of foreclosures are,” Mr. Olver said.
The funding will be distributed by NeighborWorks America, a non-profit organization created by Congress.
Eileen Fitzgerald, the company’s chief operating officer, said the counseling sessions will allow home owners to meet with advisers at no cost. The advisers will help the home owners analyze their financial situations and then review what steps should be taken. Many cases could be helped through refinancing mortgages or devising a budget, but advisers will help home owners prepare for the worst-case scenario if necessary.
“Even if there’s no way to resolve this, they’ll help home owners think about what’s the best way to go into foreclosure,” Ms. Fitzgerald said.
Last year, more than 7,653 foreclosure deeds were issued in Massachusetts, more than double the 3,086 in 2006, according to the Warren Group, which tracks the New England housing market. There are no signs of the mortgage crisis letting up, as analysts are predicting the foreclosure numbers for 2008 will double last year’s.
There were almost 800 foreclosures in Massachusetts in January, the highest number in the commonwealth since August. In January, 14 homes were foreclosed in Fitchburg, which had the eighth-highest concentration of foreclosures in the Bay State last year, according to the Boston Globe. Fitchburg had the 10th most foreclosures of any Massachusetts city or town in January. Worcester’s 34 foreclosures were the fourth-most in the state, according to the Warren Group.
After the $130 million is distributed, almost another $35 million will be released some time in the summer when NeighborWorks America analyzes where more funding is needed, Ms. Fitzgerald said.
Mr. Olver said very few homeowners have sought counseling and that now he hopes those at risk will take the initiative.
“They don’t know where to go,” he said. “Now it is the job of the organizations who are getting these monies through NeighborWorks to make certain people know.”
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