The administrators of the program "Iowa Mortgage Help" is getting over $766,000 from the federal government. Bill Brauch of the Iowa Attorney General’s office says the money is important to continuing their work. Brauch says they’re excited about getting more funds, because that means they can help more Iowans stay in their homes.
The program provides counseling and helps homeowners work out agreements to stay in their homes. Brauch says they work on two basic approaches in trying to keep people in their homes. Brauch says they provide financial counseling in budgeting, and also help in the case where they are in over their heads with an adjustable rate mortgage or something like that. He says they help the homeowners renegotiate the terms of their loan so they can stay in the home.
Brauch says the process also helps those businesses on the other side of the issue. Brauch says it helps lenders as foreclosing on a home is an expensive process, so they help the homeowner negotiate a lower payment and help the lenders from losing money on the foreclosure process. Brauch says getting the loan reworked is the toughest part of the job.
Brauch says one of the big hurdles they face is working through the bureaucracies at the lending companies, because their culture is based on collecting loans, not reworking loans. But he says lenders can lose 40 to 50-thousand dollars when they foreclose and they don’t make money doing that. He says they’re seeing a mix of people who have had problems, and new people who have gotten into trouble as the economy got worse.
Brauch says it’s time consuming to get through the bureaucracy and the new federal funds will allow them to continue working through it in a "win-win" solution for the homeowner and the lender. The initiative is a supplement to the Iowa Mortgage Hotline which has received over 12,,000 calls and worked with approximately 3,500 Iowans who’ve had trouble with their mortgages.
Brauch says you can call 877-622-4866 or visit the Iowa Mortgage Help website .