Like all good housing counselors, my colleagues and I are trained to consider a range of options for homeowners who seek our help. But, every once in a while, we work with a client who needs us to think of solutions that don’t appear in the training guides. I had one such case recently, and we are going to call him Charlie.
In January of this year Charlie came to our office seeking help with his mortgage. In 2013 Charlie’s wife passed away. As a result, his household income fell by almost half, and his mortgage payment of $1,400 per month was more than two-thirds of his remaining income. Despite his best efforts, Charlie had fallen a few months behind on his mortgage payment and he was concerned that his lender might foreclose.
After we met and considered a number of possibilities, Charlie decided that he would like to try to get his mortgage modified to an affordable payment and, at the same time, to put his house on the market so he could move to Florida.
After a month or so, Charlie’s bank offered him a modification. Unfortunately, the modified payment was only about $200 lower than the original payment. So, while Charlie would be current on his payments, his home was not sustainably affordable. Charlie was concerned that he was going to have to accept the first offer on his house – even if it was lower than the house is really worth – in order to move on with his life. That’s when we decided to see if there was something else we could do to make Charlie’s payments more affordable.
I called the tax collector in Charlie’s home town and asked her whether the town offered a discount on property taxes for senior citizens. In fact, they do. Although the application process seemed daunting to Charlie, with a little encouragement from me, he agreed to at least try.
The first application Charlie made to the town was incomplete, but with some more coaching on my part he submitted a completed application on the second try. Then we heard nothing about the application for a few weeks. So I started making weekly calls to the town’s tax clerk.
In the end, we got a great result: Charlie’s annual tax bill was cut from almost $7,000 to $1800, which, together with the loan modification, lowered his monthly payment from the original $1400 to around $780, which he can now afford.
Charlie is now able to hold out for what he thinks is a fair price for his home, and he can devote the time and energy he had been using to worry about his mortgage payments to planning the next chapter of his life.
There are obviously limits – imposed by time and other resources – that prevent housing counselors from being able to help with all of the situations our clients might face. But it is refreshing and encouraging when a little bit of extra effort can deliver a big improvement.
David Ryan is a Foreclosure Prevention & Intervention Counselor for HOMEteam.