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New Jersey Supreme Court rules lenders must include servicer information in … – The Star-Ledger

foreclosureThe foreclsoure rate is rising and so is the number of mortgage modification scams.

A mortgage lender must list its own name and contact information, as well as that of the loan servicer, when initiating the foreclosure process with a distressed homeowner, the New Jersey Supreme Court ruled today.

Under the state Fair Foreclosure Act, the notice of intent to foreclose — the first step in the process — must identify the mortgage holder and provide its contact information. But because many loans have been bundled and sold to investors, financial institutions instead have listed the servicer, a third party that collects monthly payments, disperses it to the mortgage holder and negotiates any resolution of a dispute between the lender and homeowner.

The case, U.S. Bank National Association v. Guillaume, centered around whether the financial institution, which held the mortgage for Maryse and Emilio Guillaume, supplied sufficient information when it moved to foreclose on the Guillaumes’ East Orange home. The first notice included the name of their mortgage servicer, America’s Servicing Company, as a contact to contest their foreclosure notice, but the trial court ordered U.S. Bank National Association to amend the document, which it did.

In the court’s decision, Justice Anne Patterson said the revised notice of intention satisfied the Fair Foreclosure Act and denied the Guillaumes’ motion to avoid foreclosure.

The ruling also effectively resolves a dispute between two separate appellate panels. In Bank of New York v. Laks, the judges ruled the Fair Foreclosure Act requires the financial institution to name the actual mortgage holder, and if it does not, the foreclosure complaint should be dismissed.

The court overruled that decision today, Patterson wrote.

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federal-state lawsuit accuses company of foreclosure rescue scam

(CNN) — Bella Homes LLC, a real estate investment company, and its principals are being sued by the federal government and the state of Colorado for allegedly preying on homeowners in foreclosure.

Bella Homes LLC, is a limited liability company organized in Delaware. According to the lawsuit, the company operates from the principals’ private residences in Arizona and Georgia, and maintains “virtual offices” in Atlanta and Scottsdale, Arizona.

The complaint, filed in U.S. District Court in Denver by Colorado Attorney General John Suthers and U.S. Attorney John Walsh and announced in a joint press release, alleges Bella Homes scammed more than 450 unsuspecting homeowners across the nation, including five in Colorado. The company took in more than $3 million in “rent” between March 2010 and this February, according to a press release from the Colorado attorney general’s office.

The Department of Justice alleges Bella Homes convinced homeowners to transfer their home titles to the company and enter into a type of lease agreement, where the homeowners would then rent or lease their homes back for a fee.

During the lease period, Bella Homes claimed if would work to stop foreclosure and would purchase the homeowners’ mortgages, according to the release.

In exchange, Bella Homes allegedly promised homeowners they could avoid eviction, foreclosure and ruining their credit.

The company also told homeowners they would have an exclusive option to “repurchase their homes in three years for 90 percent of its fair market value and receive credit for 60 percent of the rent paid to Bella Homes,” according to the release. Homeowners would also “enjoy a mortgage payment following their repurchase that is 40 percent to 60 percent lower than previous payments.”

The complaint alleges Bella Homes did not pay off or assume the existing mortgage, nor did it make make mortgage, tax or insurance payments on the property. Prosecutors contend the promises made by Bella Homes were false and the company actually does very little to actually help homeowners.

Calls and e-mails to Bella Homes LLC and its Georgia attorney were not returned over several days.

“Bella Homes gave false hope to desperate homeowners, taking advantage of their desire to do anything to save their homes,” said U.S. Attorney John Walsh. “Bella Homes’s actions not only hurt those vulnerable homeowners, but the housing market generally. The company will now face the consequences of its misconduct.”

U.S. District Judge Marcia Krieger granted a temporary restraining order against Bella Homes on February 15 that prohibited the company from entering into additional deals, and froze Bella Homes’ assets.

On Sunday, Bella Homes website,, was no longer available. Only the message “This Account Has Been Suspended” appeared on the site.

Bella Homes does not contest the facts, according to court documents, and it consented to stop making real estate transactions. In addition, the company voluntarily arranged to set aside $500,000 for restitution, pending a resolution in the case.

Bella Homes also agreed to cooperate with prosecutors to minimize the negative impact on homeowners and provide a list of homeowners in the Bella Homes program, according to court documents.

In the release, Suthers said Colorado law prohibits a loan modification company to charge a homeowner an upfront fee. The company can charge for services rendered, but only once the services are completed. He further warned homeowners that any time someone stops making payments on their mortgage, foreclosure could result.

Bella Homes and its principals have not filed a response to the allegations in federal court yet, but the parties are expected to be in court March 6 for a scheduling conference.

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Foreclosure prevention program helping more than 4500 NC homeowners

More than 4,500 North Carolina homeowners are receiving assistance from a federally funded program designed to help homeowners avoid foreclosure.

The state’s Housing Finance Agency last week provided an update on the N.C. Foreclosure Prevention Fund, which launched statewide in Dec. 2010.

North Carolina was one of five states that received money from a $600 million aid pool designed to prevent foreclosures in states plagued by high unemployment.

North Carolina is spending about $115 million on the program, which is based on an existing state-funded effort that provides mortgage payment help.

The program is designed to help those who have gotten behind on their mortgage payments through no fault of their own.

The money is provided as a zero-interest loan that is forgiven over 10 years as long as the owner continues to live in the home.

Before providing assistance, the N.C. Finance Agency looks at borrowers’ mortgage payment history and whether their existing mortgage would be affordable if they found other employment.

The program allows eligible homeowners to receive up to $24,000 or 24 months of mortgage payments while they seek other employment or participate in job training programs.

In high unemployment counties, the maximum assistance is $36,000 or 36 months.

The fund is adding about 500 new clients a month and is on pace to assist 21,000 homeowners over the next two to three years, the state Housing Finance Agency predicts.

When it was first launched, the agency estimated that the funds would enable it to help 7,200 North Carolinians stay in their homes over the next three years.

To find out more about the program call 1-888-623-8631 or go to here.

The state Housing Finance Agency will also host a foreclosure prevention event at N.C. State’s McKimmon Center in Raleigh on March 24 from 9 a.m. to 7 p.m.

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Foreclosures severe in central, western Palm Beach County – Sun

About 40 percent of all homes that fell into some stage of foreclosure in Palm Beach County last year were clustered in just 10 ZIP codes.

The areas where foreclosures are especially high are often blue-collar neighborhoods where older homes soared in value during the housing boom.

When the bubble collapsed, many homeowners lost their jobs and couldn’t make mortgage payments. Some simply turned the keys over to the lenders to get out of an unsolvable bind.

The top ZIP code for foreclosures last year was 33411, near Southern Boulevard andFlorida’s Turnpike, with 1,335 filings, according to RealtyTrac Inc., a foreclosure listing firm based in Irvine, Calif.

Some of the top foreclosure ZIP codes include high-end areas, such as Wellington and west Boca Raton, where borrowers tended to buy more house than they could afford.

Included in some upscale communities are smaller, older homes, particularly in the 33411 ZIP code, said Douglas Rill, broker of Century 21 America’s Choice.

Foreclosures also were prevalent in ZIP codes covering Palm Springs and unincorporated communities near West Palm Beach.

These areas now are prime targets for investors paying cash. They’re combing through the communities looking for bargains.

“They’re scooping up deals as quickly as they come on the market,” said David Dweck, founder of the Boca Real Estate Investment Club, which serves Broward and Palm Beach counties. “There are bidding wars. It’s a seller’s market in a lot of these areas.”

The market for foreclosures in South Florida is so hot that Dweck organizes monthly bus tours to help club members find bank-owned homes. Typically, the investors renovate the properties and resell them for a profit within a few weeks or months.

The housing downturn began in 2006 after five years of dramatic price increases.

To afford homes, borrowers took out interest-only and other risky loans that featured little or no money down but eventually led to higher monthly payments. A tsunami of foreclosures ensued, and the crisis worsened when the nation’s economy tanked and unemployment hit double digits.

The foreclosure problem slowed last year, following the “robo-signer” controversy that began in September 2010.

Lenders were more cautious about filing cases as they investigated possible paperwork errors after bank employees admitted they signed off on thousands of foreclosures without knowing the details.

Banks started filing more cases late last year. That trend is likely to continue, though RealtyTrac doesn’t expect a return in 2012 to peak levels of 2009 and 2010.

Deerfield Beach housing analyst Jack McCabe predicts that 2012 will be another difficult year for the housing market. He cited a figure from research firm CoreLogic showing that more than 500,000 seriously delinquent Florida mortgages may soon face foreclosure.

Meanwhile, Florida leads the nation in mortgages “underwater” by at least 25 percent, RealtyTrac said. The Sunshine State has 2.6 million of those mortgages, and California is second with 2.1 million.

People with underwater mortgages are at increased risk for foreclosure. It may be a decade or more before they’re able to break even in a sale, and some of those homeowners may simply abandon the properties.

As a result, this will be an active year when it comes to the sale of distressed properties, McCabe said. “And we may see it carry over into 2013.”, 561-243-6529 or Twitter @paulowers

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Foreclosure Dispatches: Views From Around the Country

Jessica Yager and Franklin Romeo know what it means for a neighborhood to be “hard hit” by predatory and discriminatory lending. As directors of the Foreclosure Prevention Project and Consumer Rights Project at Queens Legal Services, they have led a team of lawyers and advocates to assist more than 800 homeowners in the hardest hit borough in New York City, and to reach another 1,300 homeowners through extensive education and outreach efforts.

A recent report by the Neighborhood Economic Development Advocacy Project (see a previous dispatch with them here) shows that Jessica and Franklin’s work is far from over. In 2011, in Queens County alone, 36,590 households received “pre-foreclosure” notices. Take a close look at a map of where these defaulted loans are concentrated in New York, and the dark colors bleeding through Southeastern Queens make one thing clear: The same communities that were targeted through deceptive lending practices during the housing boom now suffer the damages wrought by distressed mortgages.

As our video series, Fighting Foreclosure (a joint project with the National Coalition for the Civil Right to Counsel produced by Sarah Reynolds) reminds us, these struggling homeowners need lawyers and counselors to navigate the foreclosure process and assert their rights. (The Brennan Center is hosting a panel discussion on these issues — and the impact of the “robo-signing” settlement and other developments — on the evening of Wednesday, February 29 in New York City. For more information visit or email

Fighting Foreclosure: Why Legal Assistance Matters from TheBrennanCenter on Vimeo.

Dispatch #4: Jessica Yager and Franklin Romeo, Queens Legal Services, New York, N.Y.

What, in your view, is the main challenge facing homeowners in foreclosure?

A simple truth has emerged from the mortgage mess: having help makes a difference. The foreclosing bank always has a team of lawyers, loan servicers, and underwriters for every single foreclosure. It’s David v. Goliath, every day, in courtrooms across the country. We support efforts to reform the foreclosure process and to protect homeowner rights, but these rights are meaningless if homeowners don’t have access to high-quality legal and counseling services.

In New York, one of the most immediate challenges facing homeowners is the imminent defunding of one of the nation’s most successful statewide networks of independent non-profit advocates (including QLS) who have been helping homeowners avoid foreclosure since this crisis began. The New York State Foreclosure Prevention Services Program has funded 120 organizations, both housing counselors and legal services offices, in every county in the state. The Program’s advocates have assisted tens of thousands of families and have helped avert thousands of foreclosures.

As we look ahead to a new wave of foreclosures on the horizon, the imminent closure of this program is devastating. Not only will homeowners be left with drastically fewer places to turn for quality, free assistance, but a perfect opening will be left for mortgage fraud scammers to prey on homeowners who have nowhere else to turn. We hope New York’s politicians will hear the call from homeowners and organizations like QLS and renew this program immediately!

What is one aspect of the foreclosure crisis that has been overlooked by the media?

Too many news stories still invoke the notion that irresponsible homeowners are to blame for the housing crisis, either by purchasing a home beyond their means or borrowing recklessly against their current home. This storyline is unfair to homeowners and distracts from the real cause of the crisis we now face: The mortgage system — chiefly banks, regulators, the credit rating industry — failed them. Banks were bent on originating (and then securitizing) as many mortgages as possible, and this business plan required borrowers. Through both subtle and outright predatory means, borrowers were systematically and aggressively induced to take on increasing amounts of debt without being provided with accurate information about affordability or risk. More coverage of these abuses would present a more nuanced and accurate picture of the housing crisis.

By some estimates, we are only halfway through our nation’s foreclosure crisis. What is the biggest change we need to make in addressing this problem going forward?

Banks need to start forgiving principal in loan modifications. The lack of principal forgiveness means that many, many homeowners cannot afford to modify their loans, and it leaves homeowners saddled with mortgage debt that far exceeds the values of their homes. Many of our clients were victims of fraudulent appraisals, their homes were never worth the value of the loan. Others were victims of the greed and lack of regulation that resulted in subprime lending boom and subsequent over-inflation of the housing market. Leaving American homeowners to foot the full price of the bill — by making them wholly and singularly responsible for the fact that they owe far more than their homes are worth — is one of, if not the, most unfair and disastrous consequences of the foreclosure crisis.

The multistate attorneys general settlement is a hopeful step in the right direction. According to a summary of the settlement terms, 60 percent of the funds going to aid homeowners directly must be put toward principal reduction. We hope this will trigger an industry-wide change in practice.

Do you think homeowners in foreclosure proceedings should have a right to counsel?

When the homeowner lives in the home, absolutely. Foreclosure is a judicial process in New York, and any litigant is at a disadvantage if he or she is forced to appear in court without an attorney. Unlike some proceedings (like small claims court) that courts are able to make fairly accessible to unrepresented parties, foreclosure law is extremely complex. Many homeowners facing foreclosure have valid legal defenses. But these involve complex doctrines and technical procedures that even the savviest homeowner would struggle to present to the court without the assistance of an attorney. A foreclosure case threatens someone’s home and their family’s greatest asset. The stakes are high enough to justify the right to the assistance of counsel.

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FHFA Will Sell Foreclosed Homes to Investors for Rentals

The Federal Housing Finance Agency
will begin inviting bids from investors to buy packages of
foreclosed properties to be offered as rentals.

The agency today said it will send detailed information to
investors who qualify to participate in the bulk-sales pilot
program. About 2,500 foreclosure homes will be marketed in
Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of
Florida, according to a statement posted by the agency on its
website today.

The program is limited to properties owned by Washington-
based Fannie Mae, which sells and guarantees home loans. The
subprime lending collapse left the company with more than
122,000 foreclosed homes, also known as real-estate-owned or
REO, when loans that it guaranteed failed. Fannie Mae (FNMA) and its
smaller rival, Freddie Mac, were taken under government
conservatorship in 2008 amid mounting losses. Freddie Mac will
not participate in the pilot programs.

Under the pilot program, the first large-scale bulk sales
effort by FHFA, investors will agree to be equity partners with
Fannie Mae.

“This is another important milestone in our initiative
designed to reduce taxpayer losses, stabilize neighborhoods and
home values, shift to more private management of properties, and
reduce the supply of REO properties in the marketplace,” FHFA
Acting Director Edward J. DeMarco said in a written statement.

Qualified Investors

The agency announced its intent to commence the program and
invited investors to apply on Feb. 1. Credit Suisse (CSGN) is the
financial adviser on the sale.

To participate, investors must show that they have the
experience and financial capacity to purchase and manage the
properties, the agency said. Once they qualify, they’ll receive
detailed information about the properties. To bid on the homes,
qualified investors must post a security deposit and sign a
confidentiality agreement to gain access to detailed
information, according to the news release.

“It’s a good first step,” Oliver Chang, a Morgan Stanley
analyst who has advocated for bulk sales of foreclosures as
rentals, said in a telephone interview from San Francisco today.
“We think the backlog of distressed homes is the biggest drag
on a recovery.”

85 Percent Occupied

The portfolio is comprised of 2,854 housing units in 2,490
homes, of which 85 percent are currently occupied by renters.
The announcement doesn’t explain several important parts of the
program, Chang said, including if the property will be sold in
geographic or property-type portfolios; if there will be
financing; how the management will work; or what, if any, stake
Fannie Mae will retain.

One of the qualified investors is Waypoint Real Estate
Group, an Oakland, California company that owns more than 1,000
single-family rentals in that state. The properties were
acquired through distressed sales since 2009, including more
than 100 purchased in January, after Waypoint announced a $250
million commitment from GI Partners, an investment fund based in
Menlo Park, California.

The Fannie Mae bulk sale is an “opportunity to be able to
buy a collection at scale in geographic markets,” said Gary Beasley, managing director of Waypoint.

Waypoint met with Fannie Mae and FHFA officials in January
to discuss the offering, Beasley said. At the time, the idea was
that Fannie Mae would sell to private investors and not retain a
stake, he said. He also said he hasn’t seen any indication that
Fannie Mae will offer financing.

Financing A Question

He has seen proposals circulated for comment by Freddie Mac (FMCC)
that would offer financing similar to what’s available for
multifamily properties, with lending based in part on the cash
flow of rental income rather than the value of the collateral,
Beasley said.

“Now nobody is making those loans for single-family homes
in the private sector,” he said.

Freddie Mac will “evaluate the pilot with our conservator
and make a decision after that,” Brad German, a spokesman for
the McLean, Virginia-based mortgage company, said in a telephone

Today, California Attorney General Kamala Harris asked
DeMarco to suspend some foreclosures on Fannie Mae and Freddie
Mac loans.

In a letter to DeMarco, Harris requested a suspension of
foreclosure sales in California for the more than 60 percent of
loans owned or guaranteed by Fannie Mae and Freddie Mac.

Harris wants the sales halted until “your agency has
completed a thorough, transparent analysis of whether principal
reduction is in the best interests of struggling homeowners as
well as taxpayers,” according to the Feb. 24 letter.

To contact the reporter on this story:
Lorraine Woellert in Washington at

To contact the editor responsible for this story:
Maura Reynolds at

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Facing foreclosure? Get help for free

Did you hear the one about the lawyers with the slick TV ads who sued the Better Business Bureau for false advertising?

No joke. Kaufman, Englett Lynd, the Orlando law firm known as KEL, sued the bureau last month in a huff over the firm’s F rating from the bureau. It’s just the latest twist in KEL’s woe-is-us saga.

The firm is battling complaints about its practice filed with the Florida Bar.

A judge’s order temporarily banned it from practicing in local bankruptcy court.

And scores of consumer complaints allege the firm took thousands of dollars in upfront payments for mortgage modifications but did little or nothing to help them — allegations the firm vigorously denies.

Though KEL insists its successes far outnumber complaints, there appears little doubt the firm has left many people very, very frustrated and angry.

But this isn’t a rant about why people hate lawyers. It’s a reminder that most people just don’t need ‘em.

Foreclosure filings hit a lull in Florida during the last year. The robo-signing scandal caused many banks to put new foreclosures on hold. That’s coming to an end, and we can expect filings to jump again.

Homeowners will be looking for help. It’s tough to navigate the system alone. Asking a bank for a mortgage modification can get complicated. And it seems as if government programs aimed at helping homeowners are too many to count, much less understand.

The process isn’t just hard. It’s scary. We’re talking about getting kicked out of your home.

Here’s the good news: There is a lot of help available in Central Florida for free. That’s right. On the house. Gratis. Complimentary.

Organizations certified by the U.S. Department of Housing and Urban Development should be the first stop for people who have fallen behind on their mortgage or are worried they’re about to.

These nonprofit groups are great resources for people who want to know whether they might qualify for a mortgage modification such as an interest-rate reduction. And most of these places keep up with the latest government programs so they can help decipher which borrowers might be eligible.

Central Florida has more than a dozen such organizations.

There’s no guarantee the nonprofits will produce the results borrowers want. But at least they don’t take your money in the process.

“If a client had $2,000 or $3,000, we’d much rather see them put that toward their home than toward [attorney] fees,” said Allie Braswell, CEO of the Central Florida Urban League, which provides free, HUD-certified housing and foreclosure counseling.

The Urban League counseled more than 400 people locally last year, he said.

CredAbility, a national credit- and housing-counseling group with offices in Central Florida, takes phone calls 24 hours a day.

“We don’t advertise — we go on word of mouth,” said Regional President Richard Schram.

He said the group would rather spend its money on programs to help consumers.

There is something, though, to the power of advertising. That’s why attorneys go on TV to play to consumers’ worst fears and assert that they can help.

Community Legal Services of Mid-Florida, another HUD-certified group, sees it all the time when clients come in after they paid a law firm for assistance they never received.

“There’s people who look on TV and see one of those I’ll-save-you ads and do it,” said spokesman Larry Glinzman.

Even Community Legal Services, a group of lawyers, acknowledges legal representation is not always necessary for a mortgage modification. But for cases that do require legal help, Community Legal Services offers free representation to homeowners who meet certain income requirements.

It’s actually illegal in Florida for companies to take money upfront in exchange for mortgage modifications. Lawyers, however, are exempt from that rule.

Far be it from me to say that lawyers are never needed. Legal counsel is an important part of some foreclosure cases.

But watching people plunk down thousands of dollars for help they can get elsewhere for free is just sad.

It’s like seeing people suffer from the housing meltdown not once, but twice. or 407-420-5448

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Take action to stop rising taxes in Richland County

Real estate appraisals in Dayton are much higher than appraisals in Richland County because Dayton is a larger city and is in a larger county. There is more industrial work, more people working and a larger population.

Richland County and Mansfield have had a high loss of population — about 45,000 — because of of the loss of industry and factory closures. For example, Westinghouse, Ohio Brass, Tappan, Borg-Warner, Globe Steel, Mansfield Tire, General Motors, Shiloh Corporation, the Steel Mill, Martin Steel, Barnes Pumps, Design Metal, Stone Container and now possibly the 179th Air Wing. That is a combined loss of about 22,000 jobs.

Now the City of Mansfield is in a fiscal crisis. Why? No jobs; no city income taxes. Now the taxes in the county are going up. If you bought a house in Richland County for $60,000 10 years ago, feel lucky if you can get $30,000 for it today. Banks are losing a substantial amount of money selling homes for 40 percent less than what is owed on them, just to recover their money. Richland County has the highest foreclosure rate — because of back taxes — than any other county. Bank foreclosure rates are high because of all the lost jobs.

People are struggling to pay their real estate taxes. County officials bring in out-of-town workforces to evaluate taxes. They should not be able to bring in a firm from Dayton, such as Tyler Technologies, and compare that with Richland County.

Elected officials don’t have to worry about where their paychecks come from.

If you think your taxes are too high, appeal them, file a complaint against the valuation of the real estate property by April 2, 2012. Take action. It’s your hard-earned money, not the county’s. Next time, remember who you’ve elected. Taxes will not stop rising unless we protest higher taxes.

Take action to stop high taxes in Richland County. I would sell my properties for a lot less than the appraised values, and yet they are still raising taxes.

Joseph A. Stimens


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Lawsuit Accuses Company Of Foreclosure Rescue Scam

POSTED: 3:25 pm CST February 26, 2012
UPDATED: 4:03 pm CST February 26, 2012

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Bank deal dollars not enough

<!–Saxotech Paragraph Count: 13

»An estimated $60 million will reduce the principal balance of home loans for borrowers at risk of or in default, facilitate short sales, forego foreclosure on the unemployed, assist with relocation, waive deficient balance and remediate blighted properties.

»About $31.3 million will allow eligible homeowners current on payments, but with an interest rate of at least 5.25 percent and negative equity, to refinance their mortgage in a way that reduces payments by at least $100-per-month.

»Another $17.2 million will be allocated in payments up to $2,000 to borrowers foreclosed on since 2008 who have lost their homes and either were not offered loss mitigation or faced improper foreclosure.

»The final $31.6 million will be kept by the state to distribute at the discretion of Wisconsin Attorney General J.B. Van Hollen’s office for uses such as compensating the state for foreclosure-related losses, prosecution of mortgage fraud or foreclosure relief programs.

The five banks involved have established phone lines for mortgage holders to call to see about benefits that might apply to them.

Romi Norton, housing counselor and community outreach coordinator for Homestead Solutions, Inc., said the assistance made available through the settlement can be one element of a plan to help struggling homeowners keep their homes. Homestead Solutions is a U.S. Housing and Urban Development-approved counseling agency that provides foreclosure prevention services in eight counties in Wisconsin.

The rate of foreclosures in the area Homestead Solutions serves has remained fairly stable in the last few years, Norton said, but there are more resources than ever available to homeowners facing foreclosure.

Norton it’s important for mortgage holders to do everything they can to avoid foreclosures.

“It’s definitely better to try to avoid it,” Norton said. “It does huge damage to your credit report, and there are so many options available. I would exhaust all options before you give up.”

But Neighborhood Housing Services of Southeast Wisconsin Executive Director Domenick Martinelli said if government assistance is being provided, it should go toward homeowners who have kept up with their mortgage payments and are trying to make improvements on their homes. He criticized existing programs for channeling government money in the wrong direction.

“We shouldn’t throw good money after bad,” Martinelli said. “It should’ve been to that homeowner down the street. He’s still got his job and he’s still making his payments and he’s still got some equity. He’s looking to make some improvements. That’s where we should have put our time and effort.”

Efforts should focus on building homeowners’ confidence and preserving the stability of neighborhoods, Martinelli said, adding that if a homeowner is underwater on his or her mortgage, a few thousand dollars from a settlement won’t help.

“If that’s what we’re doing, it’s a lot of chasing our tail,” he said.

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