More than 1,300 Kansas homeowners faced foreclosure in the first three months of 2007, according RealtyTrac. Our state ranks 16th in the nation in the percent of all mortgage loans in foreclosure, placing Kansas higher than the national average.
Foreclosure destroys homeowners' equity and ruins their credit. It often can take years for a family to recover from a foreclosure. Each foreclosure that leaves a home vacant can cost in excess of $30,000 in direct municipal cost such as law enforcement services and lost economic development. And contrary to common misperception, banks and mortgage investors lose in foreclosure, too -- at least $35,000 to $50,000 on each foreclosed home.
Easier access to home loans, an increasingly fragile economy, and mortgages that suddenly are beyond the financial abilities of the borrower are causing a climb in foreclosure rates in Kansas and across the nation.
Fortunately, there are steps Wichita homeowners can take to avoid foreclosure. The first step is asking for help. In response to the alarming foreclosure rates, NeighborWorks and the nonprofit Ad Council will launch a national public education campaign later this month. This campaign links homeowners to a toll-free foreclosure counseling hotline, 888-995-HOPE. The hotline provides free counseling 24 hours a day, seven days a week, in both English and Spanish. The goal is to steer homeowners to a trusted source for help.
Answering calls on Kansas' behalf are counselors from NeighborWorks organizations such as Community Housing Services NeighborWorks HomeOwnership Center (CHS).
In 2006, more than 25,000 overextended homeowners across the country called the hotline for help. CHS has seen the demand for help grow at a rapid pace. Our nonprofit organization, which counsels people on buying their first home, used to get two calls a month. Now we are getting two to three calls for help every day.
We are working to create a foreclosure prevention task force to bring together local banks, attorneys, credit counselors and other nonprofits to help stem the rising tide of foreclosures and work toward possible solutions. CHS also is pursuing other funding to create a rescue fund to help people in need.
Buying a home is never risk-free. It is essential that people buy homes they can actually afford, and that they not be lured into inflated mortgages by predatory lenders. The key to making a wise investment, and protecting that investment, is knowledge. CHS helps homeowners gain that knowledge.
Sunday, June 3, 2007
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