Herald News

As Foreclosures Rise, Paterson Hires Counselor

Herald News — Saturday, November 8, 2008

By DENISA R. SUPERVILLE, STAFF WRITER

PATERSON — Faced with a 49 percent increase in foreclosures and the second-highest number of foreclosures in the state, the city's Housing Authority has hired a full-time employee to work on preventing more city residents from losing their homes.

Thomas Margiotta, who was hired last month, will work with residents who are having trouble making their mortgage payments. His title is foreclosure counselor and his job is to try to renegotiate the terms of their loans, modify the interests or obtain forbearances from the lenders.

"Our primary focus is to try and educate and assist families (so they can) remain in their homes," Irma Gorham, executive director of the Housing Authority, said Thursday. "It keeps families in their homes. It keeps neighborhoods stabilized by not having boarded-up houses in the neighborhood. It keeps families intact, and it continues to enhance the city's tax base."

The Paterson Housing Authority already has an employee who counsels first-time home buyers and those facing foreclosures, Gorham said. But in the past year, more and more residents have sought help.

" 'Is it possible for you to help me catch up with my mortgage?' Or, 'Are there funds to help me while I am catching up with my payments?' Those were some of the questions we started getting," Gorham said.

Margiotta, who has a background in mortgage lending, will be paid through a one-year, $47,000 Community Development Block Grant from the city, according to the Housing Authority.

He was on vacation this week and unavailable for comment.

Those who work in foreclosure counseling say they have seen an increase in the number of people seeking their help this year as the housing market remains in turmoil.

"Our numbers have gone through the roof," said Bonita Holmes, director of loan counseling at New Jersey Citizen Action in Newark, which offers loan counseling to residents at nine locations across the state.

So far this year, the agency has seen 494 "crisis" or foreclosure clients, Holmes said.

Last year, the counselors saw 180 clients who were looking for assistance with foreclosures, Holmes said.

Citizen Action has helped 218 of the 494 crisis clients modify the terms of their loans from 30 to 40 years, refinance or ask for the late payment to be made at the end of the loan term, Holmes said. The counselors are still working with the others, she said.

"We have had banks lower the interest rate to as low as 2 percent," Holmes said. Many lenders are willing to negotiate.

"They are kind of waking up and saying, "Look, it's either something or nothing," said Toi Collins, director of housing counseling at Affordable Housing Alliance of Eatontown.

On occasion, foreclosure counselors have had to advise clients to sell their homes.

Collins said that if a client has no financial means to make even modified loan payments or the lender does not agree to change the terms of the loans, the client might be better off selling.

According to the Passaic County Sheriff's Department, foreclosures in Paterson have increased by almost 49 percent in the last year. So far this year, the office has conducted 396 sales of foreclosed properties, said Bill Maer, a spokesman for the department. At this time last year, the number was about 202, Maer said.

A report by the real estate Web site PropertyShark.com said that in the third quarter of the year, the city was second only to Newark in the number of foreclosures.

"In some cases, life happens," said Collins, of the Affordable Housing Alliance of New Jersey. "Whether it's death, or illness, or a disaster, or loss of income."

To contact Margiotta at the Paterson Housing Authority, call 973-345-5788.

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