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Moles' supervisor, NeighborWorks Director of Operations Maureen Rude, says instances like A'Lisa Scott's are becoming so pervasive that the banking business has coined a new term: "foreclosure fatigue."
"I think there's a lot of people who've been trying really hard to save their homes, and there's just a point where they just can't do anything else," Rude says. "I feel for them. And then, especially in areas where the values have gone down, they can't sell the house for what they owe and there's nobody to buy it."
Rude has worked in banking since 1992, holding positions with both the Montana Board of Housing and mega-lender Fannie Mae. When she joined NeighborWorks two and a half years ago, she took over supervision of the foreclosure prevention program and also the nonprofit's lending arm, which provides real estate loans to qualified low- and moderate-income applicants. Rude's experience with multiple banking specialties gives her a unique perspective on existing challenges.
"I'm kind of seeing, frankly, it from all areas," she says.
While it's clearly tough to face the prospect of losing a home, Rude says it's not a lot of fun to being on the other end of the conversation, fielding dozens of calls a day from people in distress.
"I know my servicer is completely overwhelmed," she says. "She's making call after call after call to these folks. [Borrowers] say they are going to pay, and then they don't follow through. That's a really hard job. I think they are really overwhelmed. I think a lot of people have been put into those jobs with very little training. I have some empathy for them, too."
Rude explains that the loan servicing business was once, before the real estate bubble deflated, simple and profitable. Mortgage company employees simply had to process payments.
"And then all of a sudden you've got this whole economic downturn and this whole flood of people who now can't make their payments," Rude says. "In many cases, their homes are under the value; we have that even in Montana. You know, people owe more than their house is worth."
Unemployment rates locally have increased steadily since 2005, settling in August at 6.6 percent. That trend is mirroring one that marks declining home value. According to the Missoula Organization of Realtors, the median price on a home sold this year was $199,000. That's down from a $212,750 median price tallied between January and September of last year. The overall equation of rising unemployment and declining home values makes it clear to Rude that the foreclosure crisis is a product of a nuanced set of variables.
"The main issue has been people losing income," Rude says.
It's clear the situation is complex and there are no easy solutions. But that's not the answer either Scott or Moles were hoping for, as they continue haggling with mortgage servicers.
"It just depends on how many phone calls you make before you give up," Moles says. "A lot of people just throw their hands up and walk away, put their keys on the counter and walk away."
Bonnie Williford from Fidelity Real Estate drives slowly through a sleepy Lolo subdivision on a Saturday afternoon in early October. She points to a large house on newly developed Stella Blue Drive at the base of the northern tip of the Bitterroot Mountain Range, and talks about how frustrating it's been trying to sell the property.
In 2007, the Stella Blue Drive residence appraised for $350,000. The owners found themselves in financial distress last year and tried to sell it for $337,000, hoping to break even. It didn't work. Financial challenges worsened, and the owners faced a potential foreclosure. Aiming to avert the long-term financial consequences of a bank repossession along with thousands of dollars in fees that would be lost to attorneys and bankers during a foreclosure proceeding, Williford decided to try to unload the home in a short sale.
A short sale involves selling a property for less than the value of the mortgage note and offers a way for homeowners facing foreclosure to salvage their credit. Whereas defaulting on a home loan blemishes the owner's credit for seven years, a short sale lingers on one's credit report for roughly two years. With that in mind, Williford found a buyer willing to offer $285,500. The only hitch, the broker says, is persuading Bank of America to sign off on the loss. After filling out reams of paperwork, she's been waiting for more than a month to hear from the lender if they have the go ahead to close the deal.
As is the case in the foreclosure process, communication proves to be the main challenge. Since there's no dialogue between sellers' agents and the mortgagers, it's a frustrating process.
"The short sale is difficult, because you cannot contact the bank," Williford says.
Mortgage servicer actions in these situations appear to have very little rhyme or reason, says Judy Fountain from Western Brokers real estate in Kalispell. Fountain saw the baffling behavior at work this past summer as she tried to short-sell a Lakeside property on a quiet street with peek-a-boo views of Flathead Lake and a 1,500-square-foot wraparound deck for $210,000. The bank didn't bite and foreclosed on the property. Once the bank assumed the title, it then turned around to sell the property at $157,000.
"I was blown away when it came on the market at 157,000," Fountain says. "There are numerous examples of that."
Even though working with mortgagers can be extremely frustrating for homeowners in trouble, the process offers a way to avoid the long-term financial scar of foreclosure. Because of that, short sales in Montana are also increasing. They're up 100 percent this year over last, with 60 filed statewide in June alone, according to CoreLogic, a real estate data services company.