Foreclosure looming? Hotline advice may help

Buena Vista: 2007-11, 2008-13 Clay: 2007-21, 2008-19 Dickinson: 2007-30, 2008-24 Emmet: 2007-32, 2008-9 O'Brien: 2007-71, 2008-7 Palo Alto: 2007-74, 2008-9 Pocahontas: 2007-12, 2008-12 * 2008 figures are through May 31

Contributing factors range from "subprime" mortgages slipping into default to wages not keeping pace with rising costs.

While Iowa had the ninth-highest rate of home foreclosures in the nation during the first quarter of 2007 and has consistently ranked in the top five states in its number of subprime mortgages in default, officials claim thousands are currently struggling to pay their mortgages around the Hawkeye state.

Iowa Foreclosures 2002: 5,507; 2003: 6,370; 2004: 6,876; 2005: 7,094; 2006: 7,998; 2007: 9,622; 2008: 4,905

In northwest Iowa, Clay County tallied 19 foreclosure filings through the end of May, two less than were filed all of last year. Compared to the county's 19 sheriff sales held throughout 2007, six have already occurred this year, with three more scheduled in July and August.

"There weren't as many subprime loans made in Iowa as in other places. And, I suspect even fewer were done in rural Iowa," Doug LaBouty, the president of Community Housing Initiatives, stated. "But realistically, I still think that's only part of what's contributing to the foreclosures. With $4 gas, food prices going up and wages not exactly keeping up with all that, I think every day people are just getting squeezed and falling behind in their house, credit card and car payments. Eventually it's going to catch up with you. Part of it (the rising trend in foreclosures filed) is the economy is tough right now for everybody."

While foreclosure proceedings can begin when a homeowner does not make his or her mortgage payment, knowing what to do about a delinquency or a foreclosure -- and acting quickly -- could save the family home.

The state of Iowa received a $1.5 million federal grant in late February to help homeowners struggling to pay their mortgages. This grant has enabled the creation of the Iowa Mortgage Help initiative, which includes organizations such as Iowa Home Ownership Education Project, Iowa Mediation Service, Iowa Legal Aid, Iowa Office of the Attorney General, Iowa Finance Authority and Strategic America.

The initiative, in turn, has been designed to increase the capacity of foreclosure-prevention counseling agencies around Iowa to supplement and expand the work of the Iowa Foreclosure Hotline established last September.

The toll-free number remains (877) 622-4866.

"We want Iowans to call the Iowa Mortgage Help Hotline if they are currently struggling or as soon as they think they may be headed toward financial difficulty," said Iowa Finance Authority Executive Director Bret Mills. "Our counselors have more resources available to help people who are in the early stages of mortgage delinquency. Ideally, we'd like to talk with Iowans before they miss a mortgage payment."

Individuals are encouraged to have several things on hand when they dial the Iowa Mortgage Help Hotline: A list of major monthly bills, their two most-recent pay stubs and tax returns, a mortgage payment statement, a mortgage loan number and contact information for their lender.

The ensuing service, which is free and confidential, offers counselors who will help callers identify the most appropriate course of action to take, whether that be a referral to a local counseling agency or a recommendation to receive counseling directly from Iowa Mediation Services.

CHI of Spencer is among the public and private agencies the state has contracted with to assist. Other counseling agencies taking part include: Center for Siouxland, Citizens for Community Improvement, Home Inc., Consumer Credit Counseling Service of Northeastern Iowa, Family Housing Advisory Services, Family Management Credit Counselors, Operation Threshold, Horizons Consumer Credit Counseling Service, Iowa Mediation Service, Consumer Credit Counseling Service of Nebraska, Neighborhood Finance Corp., and United Neighbors.

"We take referrals over for people having troubles making their house payments," said Chris Sill of CHI. "We help them with foreclosure prevention and, hopefully, to get out of foreclosure if they're already in it. All we are is mitigators in between: They call into the help hotline and get referred to us."