Rhode Island enjoys a "really good" success rate when it comes to saving the homes of troubled borrowers, according to housing counselors speaking at the New England Mortgage Bankers Conference in Providence.
"Forty-seven percent of those counseled have positive outcomes," said Helen Iasimone, director of the Homeownership Connection.
The term "positive" means anything that helps a family remain in their homes. That includes forbearance, a loan modification or even a reverse mortgage. But it doesn't include a short-sale. If it did, Iasimone said, the success rate would be more like 50%.
Now, though, "a lot" of those people are coming back for a second time because they've lost their jobs and need help again. And as a result, according to John Nimmo, a Pawtucket counselor who works for the Housing Network of Rhode Island, the Ocean State has one of the nation's highest foreclosure rates at 27%.
Counselors here also are seeing a good many people who are being taken by bogus loan modification specialists who promise to help troubled borrowers but actually leave them in worse shape.
According to Michael Williams of Neighborworks America, which operates the public awareness campaign Loan Scam Alert under a federal grant, some 2,500 schemes have been reported by consumers in the New England area. Worse, though, 23 of those home owners said they paid at least $10,000 for assistance they never received, and five said they "shelled out" between $30,000 and $58,000.
The campaign has held numerous events throughout the country – 17 in tiny Rhode Island alone – and scored millions of media placements since its inception just 11 months ago, Williams said. But Nimmo told the conference that the realization that legitimate help is available doesn't come soon enough for many people.
"We prefer that they come in before they fall behind, but that doesn't happen that often," the counselor conceded. "They're usually two or three months behind."
Or they've been burned by a bogus loan mod specialist. "Just last week, we talked to an elderly woman who paid $3,000 upfront to an attorney – an attorney! — who did nothing," said Elaine Hebert, assistant director of alternative lending at Rhode Island Housing. "If she had come to us first, she would not have been out that money."
But even though the authorities have been able to shut down a number of illegal scams artists both here and around the country, they haven't been able to stop the onslaught. "When one closed down, another one crops up," said Hebert. "They're popping up all the time."
