A state hotline set up to help Iowans facing foreclosure on their homes has been "swamped" in its first few weeks of operation. Hotline coordinator Michael Thompson says they’ve gotten more calls than they ever anticipated. Since the line was launched in September, they’ve logged over 2,700 calls.
"What we’re trying to do is…is help them comprehend what they’re facing and…get them prepared so we can look at negotiating with their creditor to see if anything can be done," he says. Thompson estimates about 60 percent of the calls come from people hit hard when their adjustable rate mortgage, or ARM, kicks up to a higher interest rate.
"For a lot of folks, it just puts their mortgage…out of their ability to pay," Thompson says. "…The other 40 percent — this is just our preliminary analysis — are people who have had life crises." According to Thompson, a divorce, a job loss or a health crisis — coupled with that higher-rate mortgage payment — have sent those 40 percent into foreclosure.
"They have an (adjustable rate mortgage), they have other problems and they don’t know what to do," Thompson says. Iowa ranks among the top ten states when it comes to foreclosures linked to adjustable rate mortgages. Thompson has run the state hotline for farmers facing foreclosure since it was launched 22 years ago and last month Iowa’s Attorney General asked him to expand the hotline to answer questions from Iowans facing foreclosure on their homes.