Colorado homeowner fighting to make sense of financial problems

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BY RICH LADEN

Published: November 29, 2008

COLORADO SPRINGS, Colo. — Homeowner and artist T. Benton Brooks isn’t in foreclosure — yet.

He’s missed two mortgage payments, but is determined to avoid losing the west-side rancher he’s owned for 18 years and where he and his wife raised a son and daughter.

At a time when record numbers of people have fallen into foreclosure in the Colorado Springs area, Brooks believes he’s the type of troubled homeowner that lawmakers, housing advocacy groups and consumer counseling agencies want to help.

So, he’s called his lender to see if he can work out a deal, contacted financial counseling services and pursued assistance through a federal program.

But after nearly six weeks of calls and faxes, Brooks has more questions than answers. Despite efforts by some people trying to help him, he’s been unable to navigate the alphabet soup of agencies and programs and still doesn’t know if he’ll qualify for financial help.

If Brooks’ situation proves anything, it’s that the same programs that have helped thousands of foreclosure victims can prove frustrating, too, say some of the people who have been working to help him.

"I know I’m a culprit,” said Brooks, who added that his financial troubles are of his own making. "But I’m also a victim.”

Brooks admits he’s made poor choices. As a car salesman years ago, he took out cash advances on credit cards during lean months — effectively borrowing money at hefty interest rates. Multiple refinancings to fund home improvements early on, and to pay off credit cards in later years, left him owing $260,000 on a home he estimates is worth $180,000. He filed for bankruptcy in 2007.

Afterward, he was allowed to stay in his house as long as he made his combined $2,115 a month in first and second mortgage payments.

In past years as a cars salesman, he never sold fewer than 12 cars a month; now, he’s struggling to sell seven or eight. He missed $1,425 payments in August and September on his first mortgage, and a $690 payment on his second mortgage in November.

Rather than wait until he got further behind, Brooks called California-based Countrywide Mortgage in September to talk about his payments on his first mortgage. But taking the initiative wasn’t a cure-all, he said.

The first Countrywide customer representative told him his loan could be re-worked, boosting his monthly payment for six months to $1,972 from $1,425. He said he told the representative he couldn’t afford the extra amount.

He called a couple of housing counseling agencies — one told him he’d have to wait until December for an appointment with a counselor. Another a counselor advised him to go back to his mortgage company for help.

In mid-October, he called the Consumer Credit Counseling Service of Southern Colorado. District Manager Mary Lou Wild arranged for an immediate appointment and called Countrywide on Brooks’ behalf. But he said a Countrywide representative told him the company wouldn’t consider assistance programs for Colorado homeowners until December.

One Countrywide representative told Brooks in October he wouldn’t qualify for Hope for Homeowners because he had a fixed-rate mortgage. But an official at a local Countrywide office told him in November that his loan was interest-only — not a fixed-rate. Later, another official told Brooks it was a fixed-rate loan and told him to fax documents to be considered for Hope for Homeowners.

Just as frustrating, Brooks said, were news stories in which federal officials complained that few people were taking advantage of Hope for Homeowners.

Catherine Carter, branch manager of the Consumer Credit Counseling Service’s northern Colorado Springs office, said counselors are learning on the fly as they work.

When dealing with borrowers in trouble, lenders must decide if they’re willing to take a financial hit by reducing an interest rate or principal balance in order to give the borrower some relief, Carter said.

Not all lenders will do so; Hope for Homeowners required participating lenders to absorb big losses on delinquent loans, which many lenders opposed, according to national news stories.

David Berenbaum, executive vice president of the Washington-based National Community Reinvestment Coalition, a homeowners advocacy group, said the number of foreclosures has overwhelmed lenders. And despite the workload, many lenders have slashed staffs, which means a backlog of at least two to three months before consumers learn if their loans can be modified, he said.