32,000 Home Foreclosures

About 32,000 metro-area homes have gone into foreclosure in recent months.

With so many people losing the roofs over their heads, where do they all go?

Some end up on the streets.

“I had a family two weeks ago that had to go to a shelter. Two kids, two older dogs,” said Bonnie Brodie, director of resident programs for the Adams County Housing Authority. The dogs went to an animal shelter.

But often, families end up in rental homes or apartments. Agencies such as the Adams County Housing Authority find apartments, negotiate with landlords and can help with the displaced family’s first month’s rent, said MaryEllen De Los Santos, housing-counseling coordinator for Adams County, an area hit hard by foreclosures.

In most cases, De Los Santos said, clients just didn’t take the time to consider whether they could afford the home in the first place.

Often, they signed up for so-called creative loans, which mask how big the payments are likely to be three years down the road.

“People get so excited at the prospect of a new house that they forget that it’s a business transaction,” said De Los Santos. “They’re totally trusting this (lender). They’re not focusing on five years from now. They’re focusing on how they’re going to do the landscaping or finish the basement.”

Not that lenders are guiltless. On the contrary, De Los Santos has seen “extra fees going back into the pockets of lenders in the thousands (of dollars),” she said. “When you see the settlement numbers, it’s disgusting.”

Why don’t home buyers question those fees? De Los Santos says it’s naivete and lack of financial education.

She and her counselors work with mortgage companies to try to avoid foreclosures for their clients. It’s frustrating work, in part because the lenders are so hard to reach.

Zach Urban, administrator of the Colorado Foreclosure Hotline (1-877-601- HOPE), has similar issues.

“It’s a fact of life. If you get a (lender) who’s cranky or not helpful, you hang up and call back.” You wait until you get someone willing to work with you, he said.

Urban oversees a statewide network of 26 housing-aid agencies, including his own staff of 13 in Denver. In April, hot-line workers fielded a record 3,900 calls.

What callers have in common is that they own a home and live in Colorado, Urban said. “I’ve had pastors and CEOs sit in that chair,” he said, indicating the seat I’m sitting in across from his desk at his office at 2250 Eaton St., where he’s director of housing counseling for the nonprofit Brothers Redevelopment Inc.

The other trait that callers generally share is shame. “Every time they call, they say ‘I’m not normally in foreclosure.’ ”

Six months ago, most of his clients were in foreclosure due to medical emergency, job loss, divorce or all three, Urban said. But in the past six months, the biggest culprit has been cheap loans coming due – interest-only adjustable-rate mortgages and 80/20 loans.

The fast appreciation of home values in Denver in the past few years led to impulse buying, said Urban. “Many buyers thought: ‘If I don’t get on the train now, I’ll never be able to afford a house. I’d better buy now!’ ” In contrast, homeownership “takes generations” in some parts of the world, such as Argentina, where mortgages are fixed at 9.5 percent for 10 years, with a minimum 30 percent down payment, said Urban.

“Part of what we try to teach here is that homeownership is not for everyone. Sometimes renting is best.”

He said the goal used to be to keep everyone in his home. Now, the goal often is simply reaching a resolution or some kind of closure for “people whose lives are in chaos.”

In the most successful cases, hot-line workers help figure out a way for the homeowner to get caught up on payments, or they negotiate a modified payment plan with lenders. But increasingly, homeowners are unloading their properties for less than they owe on it, handing the property back to the lender or accepting foreclosure or bankruptcy as the only option.

Generally the worst thing you can do, said Urban, is to ignore your late payments and then one day just leave the keys on the kitchen counter and walk away, as he’s seen people do.

Your credit is destroyed.

“It happens every day. People just lose hope. They see no way to deal with it.”

In the end, Urban said, his job is to help people make smart decisions and move on with their lives.

But he adds: “You don’t see Kleenex on my desk for a reason. Our job is to drill down and focus on mortgage issues.”

What you will see on his desk is a framed copy of the poem If, by Rudyard Kipling, and a jar of new keys. Each time his counselors solve a mortgage crisis, they get a key, a symbol of a brand-new door they’ve opened for someone.