Volunteers Reach Out to Homeowners
By Mary Ellen Podmolik| Chicago Tribune
January 7, 2010
Standing on the front stoop of neighborhood homes, Betty Gutierrez sees her community from a different vantage point than she has in the 25 years she has lived in West Lawn, Ill.
She doesn't know the homeowners, but she knows they are behind on their mortgage payments and in danger of losing their homes to foreclosure. That affects them, but also Gutierrez, so she has volunteered to help stabilize the neighborhood.
Armed with the names of delinquent borrowers from Charlotte-based Bank of America, Gutierrez and 48 other volunteers are personally calling on troubled homeowners and encouraging them to seek trial loan modifications.
"You walk up those stairs, you don't know what's going to happen," Gutierrez said. "... You see your neighborhood through a whole different prism."
Throughout the country, community groups, governmental agencies and lenders have sent out mass mailings and conducted "fix your mortgage" events in school gyms, specially outfitted buses and exhibition halls.
However, it's been hard for some communities to get out from under the crushing weight of foreclosures. Lenders, loan servicers and housing counselors don't have the resources to adequately counsel the estimated 3.2 million delinquent borrowers nationally that may be eligible for a mortgage modification under the federal government's Home Affordable Modification Program.
In an experiment on Chicago's Southwest Side, Bank of America is using local homeowners in four ZIP codes, whose own property values are at stake, to encourage delinquent borrowers to pursue loan modifications.
If successful, the effort could be expanded to other communities. BofA has more than 990,000 delinquent mortgages that could be eligible for modification,
"If this is a success with Bank of America, we have a huge lever to go to other banks," said David McDowell, senior organizer of the Southwest Organizing Project, one of the community groups.
The pilot project is an outgrowth of an emotionally charged meeting in July between more than 200 Southwest Side community residents and Bank of America, one of the larger lenders in a neighborhood racked by foreclosures.
For the first nine months of the year, lenders initiated foreclosure on 1,852 homes in four ZIP codes. Bank of America was behind 191 of those filings, the second most in the neighborhood, according to public records compiled by the Southwest Organizing Project.
A promise from the bank to fast-track trial mortgage-loan-modification applications was one outgrowth of that meeting.
School principals, ministers, priests and rabbis started talking up the community/bank partnership a few weeks ago.
Bank of America began sending letters to borrowers that were 60 days or more delinquent, detailing the local effort and the pared-down documentation needed to apply for a trial modification.
After signing a nondisclosure agreement with community groups, the bank passed along the names of delinquent borrowers so that volunteers could reach out. In the 60629 ZIP code alone, 545 borrowers were on the list.
Neighborhood volunteers who passed criminal background checks are making phone calls and knocking on doors to see whether homeowners received the letter. They encourage them to apply for a modification, and introduce themselves as neighborhood residents, church members or school parent volunteers, making it clear they don't work for the bank.
In the first week, BofA received 16 new applications for loan modifications from residents who turned them in to Greater Southwest Reach Center, another participating community group. The center had sent 56 applications to BofA in the last 18 months.
"The people who are most likely to be able to make contact with a homeowner who is embarrassed or shy about their situation is someone who lives in the community," said Robert Grossinger, a BofA senior vice president.
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