Over 100 Attend Foreclosure Panel Discussion
at Worcester State College

Homeowners who have fallen victim to predatory lending practices are not the only people affected by the current home mortgage crisis, according to a Worcester City official who presented at a panel on foreclosures at Worcester State College, Wed., April 2.  Worcester Director of Housing Enforcement Amanda Wilson said vacant buildings across the city pose potential safety hazards.   Wilson and three other panelists presented at the session that drew about 100 students and community members.  The session was organized by the Intergenerational Urban Institute.  Other panelists were: Massachusetts Housing Partnership Assistant Loan Officer Joshua Lappen, Housing Director for the Worcester City Manager’s Division of Neighborhoods and Development Scott Hayman and Neighbor Works HomeOwnership Center of Worcester Director Francis Paquette. 

Wilson heads up a property review team consisting of police officers and firefighters and inspectors who are reviewing properties to ensure safety.  “Many times, we have to secure buildings that have been foreclosed and are boarded-up.”  She pointed to one example where a city review team found a homeless man in a boarded-up building with candles, propane and kerosene.  “He was placed in protective custody and the building secured,” she said.  In addition, the rising price of copper is drawing vandals to foreclosed buildings to strip copper plumbing pipes to re-sell.  “We had a case where removal of the pipes from the hot water heater triggered a natural gas leak.”  These potential safety hazards are the reason her teams are staffed with representatives from City Police and Fire Departments. 

One of the problems, according to Wilson, is that these properties are owned by out of state mortgage companies with no vested interest in the city.

The home foreclosure problem has gotten noticeably worse in recent months according to panelists.  According to Hayman, 55 homes a month are being foreclosed on in Massachusetts. And 1 in 5 mortgages nationwide have adjustable rates.  (This means the interest rate adjusts after an initial period of a few years to a higher rates.)  According to Hayman, in 2005, $100 billion worth of mortgages were scheduled to “re-set” to the higher interest rate.  In 2007, that number skyrocketed to $1 trillion.  This can prove devastating for homeowners.  Lappen gave an example:  If someone bought a home worth $300,000 at a five percent adjustable rate, and that rate re-set to ten percent, the homeowners payment would jump from $1,750 a month to $2,750 a month.”

Local homeowners do have a place to turn, said Paquette.  His HomeOwnership Center had been operating first time home buyer classes up until a year ago, but now their main focus is Foreclosure 101 classes.  The hotline is receiving over 3,000 calls per day (888) 995-HOPE.  “We are  trying to reach out to people with adjustable rate mortgages before they re-set,”  He said.  They are unaffiliated with any mortgage company or bank and will negotiate with a lender to try to obtain a more manageable mortgage for the homeowner.  He recommended, when dealing with mortgage companies and banks, to talk with the loss mitigation department not the collection department for better results.  To learn more, visit: www.hocw.net. 

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