The sheer number of people in New Jersey facing the possibility of foreclosure provides homeowners with a window of opportunity, Stephanie Rubin told an audience in Elizabeth on Dec. 14. The numbers have created a backlog in processing foreclosures, leaving homeowners more time to seek help — and to avoid falling prey to predatory lenders.
Rubin said free counseling is available from a number of sources (see sidebar), among them New Jersey Citizen Action, the state’s largest consumer watchdog and advocacy organization. This year alone, NJCA has advised 1,200 people, compared with 350 three years ago.
A former social worker, Rubin now provides group seminars for NJCA, and she was the featured speaker at the weekly get-together for job seekers hosted by Jewish Family Service of Central NJ. The gatherings are organized by the agency’s economic response initiative team, Carol Einhorn and Sheri Brown; this week’s session focused on predatory lending.
When Rubin asked who owns their own home, almost every one of the 16 participants raised a hand. She didn’t need to ask how many are having trouble paying their mortgages; most are out of work, so that was a given — if not now, then looming on the horizon.
If it was any comfort, she let them know, they are in good company. Around 80,000 homeowners in the state are facing difficulties with their home payments; as many as 60,000 are already in arrears or actually in foreclosure proceedings.
That has created the backlog. “Usually, the process takes between nine and 15 months,” Rubin said. “At the moment it’s taking between 18 and 24. And that gives you a lot of opportunity to talk to your lender.”
She stressed the importance of doing that, rather than turning to dubious sources of supposedly easy rescue — like pawn shops, loan sharks, or illegal lotteries. She reminded them that predatory lending — making loans to someone clearly unable to afford the terms — is illegal.
Rubin said that the Obama administration’s stimulus measures have ensured that help is available to people with Federal Home Assistance loans, and — thanks to pressure from the government — more banks are becoming willing to modify loans or provide a temporary suspension of mortgage payments, to help customers reorganize their finances.
One participant said she had not yet missed a payment, so her lender might dismiss an appeal for help. Rubin emphatically rejected that notion. Drawing a parallel to someone with cancer who waits too long to see a doctor, she urged audience members to seek counseling as soon as they even anticipate difficulties.
One man asked if such a move in itself could harm one’s credit rating. Rubin said it shouldn’t, and even if such a consultation were noted as a negative, “it isn’t nearly as much of a negative as a failure to pay your mortgage.”
When it comes to getting help, Rubin said, the old adage remains true: “Anything that sounds too good to be true probably is.” She warned participants of risky financial activities like savings clubs or investment schemes, rent-to-own offers, payday loans, and loans made against anticipated tax refunds.
Instead, she urged them to use reputable mortgage lenders, read the “fine print” on contracts, not sign documents with blank lines, keep signed and dated copies of contracts, and do their best to understand “the laws and your mortgage rights.” Given how tough that last one can be, she said, it really pays to get help from a reliable expert.
Barbara Kuppersmith used to work for a recruitment agency. Now she has her own business helping individuals find work and businesses find employees. She said she has been attending the JFS weekly meetings “to learn more, to use my own experience to help other people find positions.”
As for the homeownership issue, like so many people dealing with the slowed economy, she said, she has gone through a modification of her home loan, and she was able to speak from experience on that score too. “These meetings are very good,” she said. “Sheri and Carol are really knowledgeable, and they’ve had excellent speakers.”