Legal Aid Society of Rockland County

Homeowners struggle to pay mortgages on houses of all sizes

The following article appeared May 30, 2014 on the North Shore Now website.

In the affluent Lower Hudson Valley, with $1 million homes, thousands of homeowners face foreclosure. A job loss, divorce, death or illness often causes delinquent payments.

In the Lower Hudson Valley, one of the most affluent regions of the country, where one in five homes costs a million dollars, there are thousands of homeowners still struggling to pay their mortgages, often facing foreclosure. They’re from all income brackets, living in those million-dollar homes, modest Capes, condos and Colonials. The reasons vary, but most often there is a major life change: job loss, divorce, a death in the family, or a serious illness that causes a homeowner to get behind on their mortgage or property taxes.

Foreclosure filings are at record highs in Westchester and Rockland, with Westchester experiencing filings that are triple what they were last year.

Behind the numbers are people faced with the possibility of losing their homes.

LaDonna Thompson Hutchins got behind in her monthly payments. Hutchins, a 30-year Manhattan postal worker, lives in a two-family house in Mount Vernon that her grandmother and mother bought in 1978; both have since died. With mounting medical bills and personal stress, Hutchins missed some mortgage payments and her lender took action, refusing to accept any payments until the arrears were paid in full.

Now she owes $210,000, mostly in late fees and attorney costs and is working with a counselor to reduce the payments and get back on track. The balance on her mortgage is $466,000.

“It’s my mistake. I refinanced a couple of times and fell behind,” Hutchins said. “I am making the money and they won’t give me a chance.” She rents out a 3-bedroom unit and basement studio in the house for income. “This is my house. Mount Vernon is my home.”

Eileen Marczan of East Ramapo is not sure where she and her 8-year-old son will go if she loses her home.

Marczan and her husband got behind in town tax payments after they refinanced their mortgage. A serious motorcycle accident in 2007 left her husband unable to work as a truck driver and equipment operator. The couple was paying the local property taxes independent of monthly mortgage payments and when Marczan became delinquent, the lender jumped in to pay the overdue taxes and initiated foreclosure action. She owes about $240,000 to Trustco Bank, she said.

“I am pretty disgusted right now and angry with the bank,” said Marczan, an assistant in a day care center in Congers who is now separated from her husband. The court gave her nearly a year to sort out the situation, but she was overwhelmed with the legal complexities until she connected with the Legal Aid Society of Rockland County.

Foreclosure is hitting most socio-economic groups and most neighborhoods, said Peter Spino Jr., a White Plains-based lawyer who represents homeowners in similar situations.

“We are seeing recurring spikes in the (foreclosure) numbers,” he said. “And it is climbing the economic ladder. The wealthy, who were able to stave off (legal action) because they had resources, have had those resources depleted.”

One court official told him there have been weeks with 70 filings, which is “extraordinary,” he said.

“The hardships are horrific. But a lot of people are getting loan modifications and saving their homes,” Spino said. “If you have the income to support a loan modification you can get a loan modification. But you have to remember that in Westchester the taxes are so high that you have to also estimate about $1,000 a month for taxes and insurance.”

Lenders, he added, require more assets to qualify for a loan and, in many cases, the down payment amount has risen.

Nearly two years ago Rick Lepkowski of Ossining lost his job at a nonprofit health-related agency. Three days later, his wife Lydia, a public relations executive, lost her job. Then a home equity loan on their Ossining house reverted from interest-only payments of slightly more than $2,000 a month to a whopping $6,000-plus after the lender took its option to accelerate the payback because of sliding real estate values. While the couple didn’t officially go into foreclosure it was a close call.

“We were in a precarious situation,” Lepkowski said. “I didn’t share this with anyone when we were going through it. It was a rough time.”

Lepkowski is now the senior manager of development and communications for Comunity Housing Innovations, which works with homeowners in trouble to find solutions and provides services to help low- and moderate-income families buy homes. His wife is back working, too. After many conversations with their lender, the couple worked with the bank to turn a bad loan into a manageable fixed-rate 30-year mortgage.

“We were never behind in payments, but we dipped into our savings,” he said. “It is becoming more and more difficult for the middle class to be homeowners and afford housing.”

Borrowers like Lepkowski may be back at work, but in many cases at lower income levels, said Stephanie Rojas, housing director at the Rockland Housing Action Coalition.

She urges those in trouble to get help early on.

“Everyone cares and wants to pay their mortgage. The ones who tend to walk away have more resources. I get people in all professions — physicians, lawyers, fast-food workers, real estate agents, everybody,” she said.

Hutchins said foreclosure has changed her view on homeownership.

“It is making me get my my act together and not let this happen to me again,” she said. “My mortgage will be paid. I will not refinance again and I won’t get in over my head.”

Standing anxiously in an 18th-floor hallway of the White Plains courthouse after meeting with a court-appointed foreclosure mediator, Domenic Branca of Yonkers, an English as a Second Language teacher in the Bronx, said he hoped a loan modification would address $50,000 in arrears on a $200,000 mortgage. Bought in 1995, it is his first home and he said he doesn’t plan to let it go.

“I want this over to get on with my life,” he said. “I could have sold the house in a short sale, but I did work on it. I would rather be paying a mortgage than paying rent.”

Foreclosures can take months or even years to be completed, and loan modifications have their own painstaking problems. Typically, a homeowner will meet with representatives of their mortgage lender, and the two sides pore over pay stubs, bank statements and tax returns to find out how much the homeowner can afford and plan an appropriate payment schedule.

Here are some resources:

Legal Services of the Hudson Valley at 877-574-8529 or http://lshv.org/

Westchester Residential Opportunities at 914-428-4507 or 877-976-4968 or http://www.wroinc.org/

Community Housing Innovations at 914-683-1010 or http://chigrants.org/

Human Development Services of Westchester at 914-939-2005 or http://hdsw.org

Rockland Housing Action Coalition at 845-708-5799 or http://www.rhachomes.org/

Legal Aid Society of Rockland County at 845-634-3627or http://www.legalaidrockland.org/

Putnam County Housing Corp at 845-225-8493 or http://www.putnamhousing.com/

Foreclosures by the numbers

1 in every 2,141 houses in New York is facing foreclosure

Westchester; 1 in every 2,446

Putnam; 1 in every 353

Rockland; 1 in every 811

Source: RealtyTrac

To find out more about the Legal Aid Society and how you can support their work, call (845) 634-3627, or visit their website at www.legalaidrockland.org.

RSS
Facebook
Facebook
LinkedIn
Donate