Order to buy time for families
Foreclosures blocked while homeowners seek help
By Katy Stech
The Post and Courier
Eric Dojan talks outside his Goose Creek home Thursday about what led him to seek to have his home mortgage modified under the federal government's foreclosure prevention plan.
The state's highest court has put in place a groundbreaking measure that will keep hundreds of financially struggling families in their homes while they wait for lower monthly payments through a $75 billion federal program.
The new procedure stalls certain foreclosures until lenders, who are overwhelmed with requests for lower mortgage payments, have time to look over a homeowner's case — much to Eric Dojan's relief.
The Goose Creek resident fell behind in his mortgage payments after back surgery meant he couldn't continue his job as construction foreman, which required him to climb around sites to perform inspections or to carry supplies he'd purchased at the hardware store. He said he can't work because he can't grip things properly or sit for long periods.
Now, Dojan, who used to earn a six-figure salary, is at risk of losing his two-story home in Crowfield Plantation where he and his wife are raising two young girls.
"This is where we want the kids to grow up and come back to when they move out," he said. "We didn't buy it to build up equity and go buy a bigger house. This is where we want to spend the rest of our lives."
Waiting game
More than 250 homeowners in the Charleston area in situations similar to Dojan's have asked their mortgage lenders for temporarily lower payments, according to Family Services Inc., a North Charleston nonprofit that helps negotiate with lenders. And many of those homeowners could get lower payments through a $75 billion stimulus program that will pay lenders several thousand dollars if they work with a struggling homeowner.
The lower payments, arranged through what's called a loan modification, could help ease nationwide foreclosure rates that have soared during the recession. A record 12 percent of homeowners with a mortgage were behind on their payments in the first quarter, the Mortgage Bankers Association said Thursday.
Debbie Kidd of Family Services Inc. estimates that 80 percent of homeowners who are working with the nonprofit eventually get approved for loan modification, but lenders don't have enough staff to handle the volume of requests.
"Lenders are telling us that it can take up to 90 days to get to a file because they've got so many of them," she said.
Dojan, for example, asked his lender in March to lower his monthly $1,813 mortgage payment for a few years while he figures out what kind of job he can sustain. His lender and a dozen others have agreed to participate in the federal program, but company officials still haven't gotten back to him.
"I read that plan over and over again, and I think we qualify five different ways," Dojan said.
Even if a homeowner has formally requested a loan modification, some lenders continue foreclosing on the properties.
Order in the court
The state Supreme Court order stops that.
The order, issued May 22, requires foreclosing attorneys to submit an extra document that says whether or not the property is eligible for a loan modification under the federal plan.
Commercial properties and investment properties, for example, don't qualify. But if a homeowner has asked the lender for a loan modification, his property cannot be sold at a county auction — no matter how long it takes for the mortgage company to respond.
The order also told lenders not to start foreclosing on a home if its owner has asked for a modification, even if the owner is behind on payments.
Dojan read the court order's heavily legal wording, but still understood that meant his family's home won't be sold while waiting for an approval letter.
"Seeing this gives me a sense of peace in knowing that this will get worked out," he said. "I think it not only makes my life better but it makes my girls' life less insecure."
A possible precedent
John Rao, an attorney who studies state foreclosure procedures for the Washington, D.C.-based National Consumer Law Center, said this court order is the first of its kind. Some states like California have required foreclosing attorneys to include a statement saying whether the homeowner has been contacted about a loan modification, but the South Carolina order requires attorneys to say why the property isn't eligible.
"Simply contacting a homeowner is easy to do," Rao explained. "I think what's more important is that before they process the foreclosure, a court can look at the file and see exactly why they aren't eligible, so there's some transparency."
The order actually originated from a quirky state law that prompted Fannie Mae, a government-controlled mortgage company, to ask the state Supreme Court for a 90-day delay in foreclosure proceedings for homes it guarantees. Several South Carolina consumer groups filed a response to that request, alerting the court of this backlog in homeowner requests.
Lil Ann Gray of the South Carolina Department of Consumer Affairs, which wrote to the court on behalf of struggling homeowners, applauded the court order.
"This is truly a time that I don't think many people have seen, and I think this called for action," she said. "We've got federal programs out there that could give consumers an opportunity, and the system didn't take that into consideration."
But even though the court order meant to address an outdated state law, Kidd said it could give struggling homeowners the courage to ask for a loan modification.
"When we say you don't have to lose your home, we're really serious now," she said. "There are so many programs on the table now."
The Associated Press contributed to this report.
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Comments
sardis12 (anonymous) says...
Queen Jean and the Supremes finally got something right...
May 30, 2009 at 3:06 a.m. ( permalink | suggest removal )
metallic (anonymous) says...
Another case of the government rewarding the irresponsible people who are living beyond their means.
Let them continue with their irresponsible behavior. Don't force them to move out of houses they CANNOT AFFORD TO OWN.
May 30, 2009 at 3:26 a.m. ( permalink | suggest removal )
realamerican (anonymous) says...
Posted by metallic on May 30, 2009 at 3:26 a.m. (Suggest removal)
Another case of the government rewarding the irresponsible people who are living beyond their means.
--------------------------------------------------
You don't know what the situation of these people is. They could have been the most responsible homeowner in the world and simply lost their job and are no longer able to keep up.
The irresponsible people are those like you who throw your neighbors under the bus for events that may be beyond their control.
I hope in your time of need or distress you get zero help from your neighbors. Lord knows you and those like you deserve none.
May 30, 2009 at 6:56 a.m. ( permalink | suggest removal )
babeegurl (anonymous) says...
metallic just like the above post, not all of these situations are people who couldn't afford their property. Did you read the article... the guy was earning six figures and went to nothing. I'm pretty sure he could afford the 1800 a month on six figures! Plus you don't know what his wife does for a living! All of this makes me not want to buy a house, because you never know what could happen to you or your loved one, on top of that lose something that you've already invested so much money in!
May 30, 2009 at 7:14 a.m. ( permalink | suggest removal )
GAL2000 (anonymous) says...
At least this picture did not show that he had a drink or smoke in his hand...lol...
May 30, 2009 at 7:22 a.m. ( permalink | suggest removal )
moonpie (anonymous) says...
WOW GAL you know him?
Hey court my wife is in the auto business, her pay is down $40K this year, do I qualify for a Gov loan?
An injury I'm sympathetic too but what about all the people that this has happend to, PRIOR TO the current housing fiasco? People that were forced out or sold out cheap to get from under a mortgage they could no longer pay??
RECOURSE? CLASS ACTION SUITS?
May 30, 2009 at 7:38 a.m. ( permalink | suggest removal )
gococks1985 (anonymous) says...
Metallic- how much house could you afford if you lose your job? This man did not over purchase what he could afford. He was injured on the job and is no longer able to do what he was trained to do. I know what I can afford if I lost my job, and my mortgage is much lower than his and I have 2 girls as well.
GAL2000- would it matter if it did? I mean really a drink or smoke...I might concede on the drinking part, but anyone who smokes, knows it's much harder to quit than the "non-smokers" think it is. The worst are those who used to smoke and have quit.
May 30, 2009 at 7:41 a.m. ( permalink | suggest removal )
MontessoriMom (anonymous) says...
Stop judging. Not everyone is irresponsible. Any of us could get hurt and no longer be able to work. I am new to these postings and I'm trying to figure out why some people post such derogatory statements. Are we that cynical?
May 30, 2009 at 8:43 a.m. ( permalink | suggest removal )
CaptPete (anonymous) says...
Dojan who cares if you have a bad back. Many others do and they pay their house payments. Pay your bills you bum.
May 30, 2009 at 8:53 a.m. ( permalink | suggest removal )
majorjohnson (anonymous) says...
When I bought a house I searched hard for something cheap enough that the payments would allow me to continue paying even if my income dropped to practically nothing. I paid 20% down and my mortgage payments plus escrow are lower than many peoples electric bill. I have 3 small bedrooms in my little 1000 sq ft house, and it's raised quite a few families since it was built in the 1930's. Look at the size of this guys house. I'm single and was making in the $70's when I purchased mine which probably equates to more than he was making with a family of four. He reached as high as he could afford without planning for bad times and now he's in trouble. Go figure!
I feel sorry for him and his family, but life doesn't always treat you well and you have to plan for the rainy days or you're bound to get wet. Why do I have to pay for his umbrella now? I bet he has a tv in every room, cell phones for everyone, multiple credit card bills, multiple car payments, beautiful furniture, etc...none of which I have. I did without and minimized in case bad things happened, and now I'm not making even close to my old salary but I'm still able to live comfortably. You people who feel so sorry for him that you're willing to have the government take money from me to pay for his aren't showing me much of that compassion and empathy, I guess because I won't need it until you've taken enough of my money that even my planning for bad times isn't going to help me. I planned for my bad times, not to support every yahoo with a high def tv and no means to pay for it.
May 30, 2009 at 9:24 a.m. ( permalink | suggest removal )
mbookworm (anonymous) says...
My Husband has had 3 back surgeries and has chronic pain and loss range of motion. He is a carpenter and builder. He should not be working according to his Dr... but he works through the pain while climbing ladders, stairs, working over his head, etc... He does what he HAS to do to keep our family in our house... Thankfully we are modest in what we live in and don't live beyond our means... This guys needs to grit his teeth and get off his a** for his family.
May 30, 2009 at 9:28 a.m. ( permalink | suggest removal )
theronce (anonymous) says...
I am part of the baby boom, the "me" generation, with a conservative, hard core patriotic, and religious background. Normally, I am opposed to government handouts. As some posters say, most are unwarranted reward for bad behavior to a government-created class of citizens. In the class warfare of the last 30 to 4o years, the rich and the poor trundle right along with their government handouts. The middle class usually quietly pays their taxes and muddles through doing the best that they can. This particular handout is one of the very few that probably will go to the middle class for the most part. While I do not particularly like it, I do not begrudge this either. We, unlike my parent's generation and those before them, have not really been tested. Looking at our situation, I think that it would be wise for those in this family's situation to go ahead and take this but also start moving to unload their debt. I think that we all need to think about unloading any debt and becoming self-sufficient for our families and at least one neighbor.
May 30, 2009 at 9:36 a.m. ( permalink | suggest removal )
PoliGadfly (anonymous) says...
Hurt? Can't work?, Fear of losing your home or can't pay your bills? Call U.S. Govt for homeowner mortgage protection, workman's comp, social security disability and all your insurance needs.
(U.S. Govt. is a socialistic and wholly owned subsidiary of U.S.Taxpayer with representatives in all 50 states as well as overseas.)
May 30, 2009 at 9:59 a.m. ( permalink | suggest removal )
metallic (anonymous) says...
"realamerican" posted:
>>You don't know what the situation of these people is. They could have been the most responsible homeowner in the world and simply lost their job and are no longer able to keep up.>The irresponsible people are those like you who throw your neighbors under the bus for events that may be beyond their control.>I hope in your time of need or distress you get zero help from your neighbors. Lord knows you and those like you deserve none.>metallic just like the above post, not all of these situations are people who couldn't afford their property. Did you read the article... the guy was earning six figures and went to nothing. I'm pretty sure he could afford the 1800 a month on six figures!<<
And while making a six figure income, he apparently never saved money for a "rainy day." Now you think the rest of us (many who have lived within our means, like "majorjohnson" explains in his above post) are supposed to bail him out?
May 30, 2009 at 10:32 a.m. ( permalink | suggest removal )
issuetaker (anonymous) says...
Whew! What a relief. Aren't we blessed with bunch of multitalented jurists? I mean, to get in there and modify contracts involving Fed. law in a "groundbreaking" decision which impairs the rights of lenders such that they don't get the benefit of their bargain because too many want to take advantage of another program, wow, that's something!
And the Gov. didn't think they could properly interpret Fed. law.
This should certainly prove there's no legislating from the bench, eh?
May 30, 2009 at 11:16 a.m. ( permalink | suggest removal )
JustJennings (anonymous) says...
All the help goes to the people who tried to put on a show a buy a bigger house than they could afford. What gets done for the little guy who could never afford to do anything but rent?
May 30, 2009 at 11:35 a.m. ( permalink | suggest removal )
JohnS (anonymous) says...
I bet he has a 50 inch flat TV with all the good cable channels too.
May 30, 2009 at 11:45 a.m. ( permalink | suggest removal )
babeegurl (anonymous) says...
You have no clue what got him in this rutt.....He had to pay for surgery, his savings is invested in his kids, how long has he been out of work and had to use up his savings. We don't know what the circumstances are! I agree with theronce on the middle class issue who don't make enough or make too much to get anything. This is the one thing middle class people probably will ever get. Obviously something is wrong in this economy with all the foreclosures happening not just a few here and there for people who bought in too deep, but something is happening to people who were even careful. I do understand he should have been a little more careful, but give the man the benefit of the doubt, even savings can only take you so far! If we constantly think about the "WHAT COULD HAPPEN" we would never obtain anything in life because there are always risks!
May 30, 2009 at 11:51 a.m. ( permalink | suggest removal )
Luna (anonymous) says...
If you foreclose on all the people who are behind, what will happen?
A glut of properties on the market; which in turn causes all our home values to decline.
The banks would do better to reduce the interest rates and keep the people in their homes. They are still getting income. Our property values do not go down.
What happens when they foreclose? Take a look at the Florida market. Do you really want that happening here?
Think it through, knee jerk reactions are just that knee jerk.
May 30, 2009 at 11:52 a.m. ( permalink | suggest removal )
issuetaker (anonymous) says...
Even so, the court's aren't the ones to make policy decisions like this.
May 30, 2009 at 12:19 p.m. ( permalink | suggest removal )
tj (anonymous) says...
If he qualifies for the help more power to him!
Bad things happen to good people, that doesnt mean they deserve to be thrown on the streets for it. Hopefully he can get it together, but 1800.00 a month! Thats a hefty payment, no wonder he is struggling.
Good Luck to you!!
May 30, 2009 at 2:53 p.m. ( permalink | suggest removal )
sardis12 (anonymous) says...
I don't usually agree with Jean Toal about anything, but I do think it was right for the court to step in here...
The courts have to worry about docketing these cases. Foreclosure sales used to take place one day each month, now there are three or four sale days in some counties. A process that used to take five or six months can now take over a year. More cases would only make things worse, and the legislature hasn't provided funding to increase the court staff and judges that are needed to handle such an onslaught if the rush to foreclosure continues.
Ideally the lenders would work with the homeowners, but the order only delays cases where the homeowner has formally asked for a loan modification, so it really leaves it in the hands of the lenders, who can expedite things by considering loan modifications more quickly.
May 30, 2009 at 3:29 p.m. ( permalink | suggest removal )
Madison (anonymous) says...
Honk if you are paying your neighbors mortgage! I have no sympathy for these people. Have any of you heard of disability insurance. For a whopping 300 bucks a year this man could have insured against this and would be enjoying a salary while out of work. I would assume someone making 6 figures could afford 300 a year... ever heard of socking some money away for a rainy day. PEOPLE WAKE UP, IT WILL EVENTUALLY RAIN!!! What a joke... shame on them.
May 30, 2009 at 5:42 p.m. ( permalink | suggest removal )
SeaSaw (anonymous) says...
What really gets me is all the ones that wanted easy money and instant gratification. They refinanced and pulled out the equity that had built up when prices started skyrocketing. They used this money to purchase the things they wanted. New furniture, TVs and all the other items that a young family think they need. Now the market has tanked and their in trouble. These are the people I don't want to help. They will never learn to manage money, because they don't have to as long as we keep bailing them out. Oh by the way, I looked up this Eric Dojan on the Berkeley County Register of Deeds. You guessed it, he has refinanced a couple of times, pulling money out each time. He's a huge fan of adjustable rate mortgages, this guy needs a course in money management big time.
May 30, 2009 at 6:24 p.m. ( permalink | suggest removal )
PoliGadfly (anonymous) says...
Thanks for "the rest of the story" SeaSaw.
May 30, 2009 at 9:01 p.m. ( permalink | suggest removal )
GAL2000 (anonymous) says...
Ah, yes, thanks Seasaw and Poligadfly...I was about to pull his record up the more I kept reading these posts that made more sense than the story did...
June 12, 2009 at 10:10 p.m. ( permalink | suggest removal )
veronicabenn (anonymous) says...
If anyone has had any luck with any of these companies, could you please post it for the ones that cannot find one to work with you. We've almost lost once and just got a second chance that want last long so I need to get something done now, so if anyone knows the right number to call, i am sure a lot of people that hasn't found them would appreciate it but check out http://obamamortgage2009.blogspot.com or obamamortgage2009.blogspot.com
June 15, 2009 at 12:26 a.m. ( permalink | suggest removal )
rosiehazzard (anonymous) says...
I own a condo and have an outstanding balance of $140k, consisting of $104k primary and $36k secondary. I took the home equity to consolidate debts. At the time the property was valued at $163k but now it is valued at $134k. I'm looking to sell because i am engaged and will be moving into my fiancee's home. Check http://obamamortgage2009.blogspot.com... If I have a buyer who offers me within say $5-7k of the outstanding, can i agree to assume a loan on the residual and pay the bank the difference over time with interest? The same bank holds both mortgages.
June 18, 2009 at 5:40 a.m. ( permalink | suggest removal )
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