Community Development Corporation of Utah

Helping Homeowners in Need

CDCU Success Story, March 2011

Margarita and Jorge Gerardo are like so many who worked hard to buy a home, but came up a little short and needed some assistance to make homeownership possible.  A couple of years ago, the Gerardos came to Community Development Corporation of Utah (CDCU) and applied for $5,000 in down payment assistance funding through Salt Lake City to help them buy their first home.  But recently, life changed drastically for the Gerardos.  Margarita was seriously injured in a car accident and eventually lost her job.  This was devastating given that Jorge has been disabled since 2002 due to complications from spinal cord surgery and has not been able to work ever since.   Margarita was able to receive unemployment benefits, but it was not enough to make ends meet.  Yet, their son, who was living at home, began full-time employment, and the extra household income would make all the difference.

With two children still living at home and a tight job market, the Gerardos became concerned when bills were mounting and they could no longer keep up on their mortgage payments. They tried to negotiate solutions with their mortgage lender, but were denied several times.  When they ultimately received a Notice of Default, hope of keeping their home quickly began to fade and they knew they needed professional assistance.  That is when they returned to CDCU for help. They met with Jay Bladen, a CDCU Housing Counselor, who immediately went to work to help the Gerardos.  “They were about a month away from a foreclosure sale date and knew saving their home would be a challenge,” said Jay.  “They mainly speak Spanish so I translated their hardship information, helped them complete a request for a mortgage modification, and sent the packet of information to their lender.”

Community Development Corporation of Utah was successful in getting the sale of the Gerardos’ home postponed.  From there, it was a matter of Jay staying on top of the lender to make sure they were following through with the modification request.  It took about a month, but the modification papers were finally approved and signed, and the Gerardos kept their home.  “Jay was very helpful and worked hard to help us keep our home,” said Margarita.  The modification the Gerardos received resulted in a slightly higher payment, but brought them current and out of foreclosure.  The past-due payments were rolled into the loan and they were able to start fresh with a new payment while Margarita finds new employment.  What is more, the down payment assistance loan they received will stay with their mortgage and will not become a loss incurred by Salt Lake City.

This is the difference an experienced housing counselor can make and is why so many families come to CDCU for assistance.  Stephanie Hanson, CDCU Housing Counseling Program Manager, explains “The ability to get a workout is completely dependent on the rules of both the mortgage servicer and the mortgage investor, as well as the client’s budget and income. Though we cannot guarantee a workout, we can improve the odds by approaching the mortgage companies as professional HUD counselors who have done a lot of the leg work in advance. Most mortgage companies are providing more workouts than were previously available, and they prefer to work with housing counselors because a counselor has spent time with the family making sure that a particular type of plan will work for them. This saves the mortgage company valuable time and they tend to have more successful workouts.”

The good news is more and more mortgage companies are referring clients to a counseling agency like CDCU and some will not even consider helping borrowers until they have been to counseling. The benefit of a housing counselor is that he or she can help a family to understand all the different types of workouts, which ones they might qualify for, and how to develop a plan to implement a workout successfully. However, there are many other options available depending on the family’s situation. An experienced housing counselor will spend time working with a family to make sure they understand the foreclosure process in Utah.  This includes showing them how to avoid the many scams targeted at delinquent homeowners, how to go about catching up on their missed payments, and how to understand the implications of a short sale or foreclosure.

For those seeking to buy their first home, CDCU has seen time and again that homebuyer education helps homebuyers gain the necessary information to buy with confidence and also allows them to have a better chance of being successful long-term homeowners.  For current homeowners feeling that all may be lost, CDCU offers hope through experienced and caring counseling.  In the last year alone, CDCU has counseled 552 homeowners facing foreclosure and has seen a great deal of success with those that stay with a foreclosure prevention plan provided by a CDCU housing counselor.

As for the Gerardos, the challenges that face all homeowners still exist, but they are confident that with a fresh start they will remain successful homeowners.  “We are very grateful for Community Development Corporation of Utah; the help they gave our family made all the difference in the world,” said the Gerardos.