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Santa Rosa workshop focuses on foreclosure issues
Jose Luis Rosilla and Rocio Rosilla, right, work with a representative of Chase Bank during a foreclosure seminar at Redwood Credit Union in Santa Rosa on Saturday.
KENT PORTER/The Press DemocratPublished: Saturday, July 24, 2010 at 4:55 p.m.
Last Modified: Saturday, July 24, 2010 at 6:34 p.m.
Jose Luis Rosillo, a winery production worker, and his wife, Rocio, who works at Wal-Mart, have figured out how much they can pay to keep their Healdsburg home.
Although their salaries are modest, the family receives another $600 by renting space in their three-bedroom house. They could stay afloat if their bank reduced their current mortgage payment by $1,000 to $2,500 a month.
On Saturday, Rosillo and his wife attended a foreclosure prevention workshop in Santa Rosa, hoping to learn about getting a loan modification.
"We just can't make the current payment," he said. The Rosillos have fallen three months behind on their mortgage since it rose to $3,467 a month in March.
Jose Rosillo, a former construction worker who used to earn from $25 to $30 an hour, now earns $12. The couple, who bought their home six years ago for $495,000, estimate they are between $100,000 and $150,000 "under water."
The workshop was sponsored by the Federal Home Loan Bank of San Francisco and HID-HCA, a federally approved housing counseling agency. Held at the Redwood Credit Union headquarters, it also included information and assistance for first-time home buyers.
One of the key features was the chance to speak face-to-face with representatives from banks, including Chase, Bank of America and Wells Fargo. About 70 people registered for meetings with bank representatives, and another 30 signed up to see a federal Housing and Urban Development agent.
Carrying folders bulging with mortgage documents, rejected loan modification applications, hardship letters, and more, dozens of individuals and couples waited for their chance to speak to a bank representative.
The common thread was that all were having trouble getting banks to modify their loans so they could keep their homes.
Some homeowners complained about getting the runaround from lenders, being told that their loan modifications were incorrect or incomplete, or that their paperwork was lost and would have to be resubmitted.
"It's at the point where you want to walk away," said Paul, a Petaluma resident who asked that only his first name be used because he didn't want his personal financial information made public.
Paul, who works as a buyer for a local winery, bought his three-bedroom, two-bath home in 2006 for $545,000. At the time, his wife was doing well as a real estate agent and his initial "interest-only" payment was low.
But when the economy tanked, his wife's income vanished and his mortgage rose to $2,700, with a second mortgage. Even though Paul is making about $23,000 a year more than he was three years ago, he's had trouble getting a loan modification.
Technically, he's now seven months behind on his mortgage because he's not been making the full payment amount.
He began the process of modifying his loan with an application in May 2009, when he was still current on his payments. But he heard nothing until November 2009, when he notified the bank that he could no longer make the full payment on his first mortgage of $2,256. He has remained current on his second mortgage payment of $505.
In December, the application he submitted in May was denied. He submitted another in January and that one was denied around March.
"They said I was making too much money," he said. "After all my bills, they were saying that I was carrying over another $2,000. Why would I be going through this whole process if I had that much money left over?"
Paul is now going through his third loan modification. He attended the seminar Saturday to get some assurance that he wasn't on some parallel track that would end in foreclosure.
"Now I need to talk to someone," he said. "I don't believe them."
Rep. Lynn Woolsey, D-Petaluma, a guest speaker at the event, assured homeowners that she was doing everything she could in Congress to help people avoid losing their homes.
After her talk, Woolsey said banks are not being aggressive enough in modifying loans, especially because of all the taxpayer assistance that's been given to financial institutions.
"There ought to be a law that makes them spend that money," she said.
In their defense, bank executives argue that overly complex and shifting guidelines for the federal Home Affordable Modification Program have made it difficult to establish procedures and train staff for handling the massive number of applications submitted by homeowners.
Dwight Alexander, director of legislative and regulatory affairs for the Federal Home Loan Bank of San Francisco, said banks are overwhelmed by the current volume of applications and foreclosures.
He said the system is set up to focus on those who will ultimately lose their homes, even with a loan modification.
Those who are financially able to hold on to their homes are being swept up "in the flood," he said.
You can reach Staff Writer Martin Espinoza at 521-5213 or martin.espinoza@pressdemocrat.com.
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