THE LEHIGH VALLEY’S FORECLOSURE CRISIS

A SURVEY OF HOMEOWNERS SEEKING CACLV INTERVENTION

CACLV is committed to helping low- and moderate-income people in the Lehigh Valley weather the continuing mortgage crisis by ensuring that as few families lose their homes as possible. One important step toward achieving this is to study the foreclosure crisis and use the information gleaned to plan as we move forward. Toward that end, CACLV recently conducted a 35-question loss mitigation phone survey with 60 people who had sought our foreclosure mitigation services, the highlights of which are found below. In addition, a compelling finding came to light during this process that supports the theory that homeownership counseling provides a buffer against foreclosure–only 2 of the 455 homeowners who received CACLV’s foreclosure diversion services in 2009 also graduated from CACLV’s Homeownership Counseling Program.  

Survey Highlights 

  • Fifty-seven percent of respondents who sought assistance from CACLV were able to either obtain a “work out,” a forbearance, or refinancing from a different lender to stay in their home; 2% did a short sale; only 3% lost their homes. By contrast, over 3 million homeowners nationwide defaulted on their loans in 2009, and just under a third of them lost their homes. 
  • Homeowners in default who benefited from CACLV’s services were 90% less likely to lose their homes than those who did not.   
  • Fifty-eight percent of respondents reported experiencing a new financial hardship since contacting CACLV for help with their mortgage: 14% lost their job, 15% experienced an injury or sickness that prevented them from working, and 29% reported health care costs as presenting them with severe financial hardship. Perhaps as a result, 61% of these respondents reported having difficulty making their mortgage payments (compared to the 50% of respondents that reported actually having fallen behind on their payments). 
  • Forty-six percent of respondents had been contacted by companies attempting to profit from the homeowner’s misfortune.   
  • Respondents were optimistic about their future financial outlooks, with 76% thinking their personal financial situations would improve in the next year and 54% thinking that the national economic situation would improve over the next year; 41% of participants were confident that both their personal finances and the national economy would get better. 

The complete report can be found here.