At night, Margaret Jones would lie in bed, unable to sleep, her heart galloping.
Each time she came home, she feared the worst: a padlock on her door and a sign declaring her home in foreclosure. She was months’ behind on her adjustable-rate mortgage, which she’d become unable to pay as the rate climbed from 7 percent in 2004 to 12 percent this year. Her three-bedroom house, she was told, would be auctioned on July 1.
“My blood pressure was through the roof,” says Jones, 45, a nurse. “I can see why some people commit suicide. You just want it to go away.”
But the worst never happened. Rescued by a hardship loan and a mortgage-modification plan, Jones managed to stave off foreclosure and save her house.
Though the number of homeowners facing or going through foreclosure has surged — filings nationally rose 55 percent from July 2007 to July of this year — thousands of other homeowners on the verge of losing their homes are finding last-minute ways to ward off foreclo-sure. These tales have become the little-known success stories of the worst housing slump in decades. For a smattering of today’s dis-tressed homeowners, last-ditch remedies intended to stem the damage have saved the day.
Right Direction
Jones took out a $26,000 hardship loan from her 401(k) to pay off much of what she owed. She also managed to get her mortgage modified by calling a hotline for a credit-counseling organization, Money Management International. (The agency is part of the Home-ownership Preservation Foundation, which oversees counselors and runs a hotline with Hope Now, an industry-sponsored alliance to help troubled homeowners.)
Jones’ monthly mortgage bill dropped from $3,000 to about $1,800, and her interest rate is down to a fixed rate of 7.4 percent. She’ll pay her first lower monthly payment in October.
“Now, I have peace of mind,” says Jones, a mother of five whose husband, Deryck, is unemployed. “I can eat. I’m no longer afraid of the knock on the door or the sign on the front lawn. It’s changed me. Now, I will send my payments in ahead of time. I may lose my water, my light, but I won’t lose the roof over my head.”
Those who have managed to save their homes remain a small fraction of people at risk of losing their properties. One in every 464 U.S. households received a foreclosure filing in July, according to RealtyTrac. More than 2.2 million foreclosure filings were reported dur-ing 2007, up 75 percent from 2006. The number of homes in some stage of foreclosure was up 79 percent, indicating that some proper-ties may have just entered the initial stage in 2007 and could be completing the foreclosure process in 2008.
