Efforts grow to deal with spike in R.I. foreclosures

As the number of foreclosures continues to climb, Rhode Island Housing is stepping up its efforts to aid struggling homeowners, with a new “help center” set to open at its Providence headquarters on Nov. 13 and new “home saver loans” under development.
The help center will offer free advice and counseling to homeowners in danger of foreclosures. Eight staff members will be assigned to assess each case and provide guidance in either saving the home from foreclosure or helping people cope with the loss of their house.
Rhode Island Housing officials say there’s a desperate need for this type of counseling. Cathleen Paniccia, the agency’s director of homeownership, said 1,300 homes have been advertised for foreclosure in the last year, about 600 of them in Providence.
“It has become abundantly clear that Rhode Islanders need somewhere to turn for help – a safe place that they know they can trust,” said Richard Godfrey, the agency’s executive director.
At the same time, Rhode Island Housing is seeking to add a new loan program, the “home saver loans,” that would allow eligible applicants to refinance up to 100 percent of their home’s value at terms more favorable than conventional loans.
Agency spokeswoman Jo-Ann Ryan said the loan product, which would be aimed at low- and moderate-income homeowners, would be much like the agency’s First Homes program for first-time homebuyers. It has not yet received final approval, Ryan said.
Paniccia noted that while the home saver program would only apply to a small percentage of homeowners facing foreclosure, the help center will serve a broad constituency.
Funded by a portion of a $165,000 grant from the U.S. Department of Housing and Urban Development, the center will be on the first floor of Rhode Island Housing’s office at 44 Washington St., Providence. Agency officials said the help center will complement the Don’t Borrow Trouble Rhode Island campaign, an effort that brought together several groups – including the Housing Network of Rhode Island, the Consumer Credit Counseling Services and Rhode Island Legal Services.
“Back in 2001, 2002, we kind of saw the writing on the wall that people were getting into loans that perhaps were risky,” Ryan said. “And the campaign was design to help people make sure the loans they were taking were good loans for them.”
As part of the Don’t Borrow Trouble program, first-time homebuyers are offered pre-purchasing counseling through the Housing Network to help them avoid a risky loan.
“There is such a great need for counseling, and the increase of foreclosures has strained the resources of counseling providers,” Ryan said. “The help center is another tool in our kit to make sure people are successful and avoid foreclosure.”
Millions of adjustable-rate mortgage nationwide are due to reset in the coming months, including in Rhode Island, where a high rate of homeowners relied on subprime home loans to finance purchases. Paniccia said counselors will assess each case and develop a plan to resolve the problem. In many cases, the lender will be contacted to try to work out a solution.
Homeowners in financial trouble also may be referred to legal services or credit counseling. Or if it’s too late to prevent a foreclosure, they might be offered assistance in finding a new place to live. •
For more information about the Rhode Island Housing Help Center, call 457-1234.