Two years ago, an 86-year-old woman got a 40-year, $274,000 mortgage with an introductory rate of 1 percent. Her monthly payment was a little more than $500 — but her income consists of only an $830 monthly Social Security check.
She recently got a three-day notice of eviction on her house, which now has been foreclosed upon, Michele Johnson of the Consumer Credit Counseling Service told the Las Vegas City Council on Wednesday.
And it’s people like that woman who need to be reached if the mushrooming foreclosure crisis is to be addressed, officials said, pointing to a set of people who are not being served by the housing measures put in place so far.
“What about the poor people who’ve lost their homes already?” asked Mayor Pro Tem Gary Reese.
“It is a huge problem,” Johnson said. “The problems that the valley is facing are so overwhelming, given the resources available.”
Thousands of homes are in foreclosure or preforeclosure across Southern Nevada. State and local leaders touted some new legislation recently aimed at repopulating and redeveloping foreclosed properties, but council members reiterated their frustration Wednesday that not enough is being done to keep people from being foreclosed upon in the first place.
“That’s the fallacy, and that’s the weakness,” said Mayor Oscar Goodman. “I think they’ve done it inside out and upside down and backwards.”
A spokesman for Senate Majority Leader Harry Reid, D-Nev., said that aid for staving off foreclosures is in the works.
“This was discussed at length at the event we held a couple of weeks ago in Las Vegas,” said Jon Summers. “We are going to try to include foreclosure prevention measures in the next economic recovery package we will work on during the lame duck session, which starts the week of Nov. 17.”
In the meantime, people in danger of losing their homes should not bury their heads in the sand, Johnson said.
“A foreclosure is not a death sentence,” she said. “There’s a right way and a wrong way to go through a foreclosure.”
The right way is to stay in touch with the lender and get help from a HUD-approved credit counseling service, she said.
Also, maintain the property, list it for sale and trim other expenses and debt.
Often the biggest step people have to take is to admit that they cannot afford the house, Johnson said.
“It’s unrealistic to expect that everybody in a home who can’t afford their payment will be able to save their home,” she said. It’s a reality check when people realize “the only way it was affordable to begin with was through a creative loan product.”
The local branch of the Consumer Credit Counseling Service is working with 1,200 people a month, a 70 percent increase over last year.
Workers there were able to get the senior citizen with a three-day eviction notice more time to move out.
“They’re not all low- to moderate-income people,” Johnson said. “Income isn’t a qualifier for whether somebody is able to afford their mortgage payment or not.”
The goal is to get people to focus on their financial situation and find alternatives to simply walking away from properties.
“The only way we can do that is by reaching them sooner,” she said. “That will eliminate senior citizens calling and saying, ‘I have three days to move.'”
Contact reporter Alan Choate at email@example.com or 702-229-6435.GETTING HELP
The following are mortgage counseling agencies listed as approved by the U.S. Department of Housing and Urban Development:
• Consumer Credit Counseling Service of Southern Nevada
• ACORN Housing
• Community Services of Nevada
• Neighborhood Assistance Corp. of America
• Nevada Legal Services
• Women’s Development Center
• NID-HCA of Las Vegas