Mortgage crisis may not subside for years
North County remains a foreclosure 'epicenter"?
"We're projected to get more foreclosures in the next six months as rates reset on adjustable-rate mortgages," said Karen Wallensack, who directs the Catholic Charities Housing Resource Center in St. Louis.
The center works closely with a number of area nonprofit organizations to provide aid and counseling to homeowners facing housing and mortgage issues.She said it may be two and a half years before the crisis begins to fade.
Much of the foreclosure activity remains in older, inner-core suburbs of North County.
"North County is one of the epicenters for foreclosures," she said.
Interest rates on adjustable-rate mortgages are being adjusted upward. Higher interest rates mean higher monthly house payments that a number of homeowners can't afford.
St. Louis County Planning Department officials say many of the foreclosures are concentrated in municipalities such as Dellwood, Spanish Lake, Bellefontaine Neighbors, Jennings, Berkeley, Pine Lawn and Glasgow Village.
Wallensack said it's critical for homeowners who are behind on their mortgages to call their lenders.
"We continue to see people waiting after not making their payment for 30 days," she said. "We like to say that there is nothing worse than doing nothing."
Often lenders can work out an arrangement with homeowners to avoid foreclosure proceedings.
The crisis has affected homeowners throughout the area. Wallensack said her list of clients seeking help includes at least a dozen homeowners in Florissant.
"We've got to do something with residents that are facing foreclosure," said Florissant Mayor Robert Lowery.
At the March 10 Florissant City Council meeting, Lowery said the city would use federal grant monies to pay for financial counseling services for residents at risk of losing their homes.
For more information on the counseling services, Florissant residents can call the mayor's office at 839-7601.
The city is not providing direct financial assistance. Homeowners seeking direct assistance are urged to call 1-888-995-HOPE.
Since last summer, five nonprofit organizations have banded together to provide direct aid to some homeowners.
Along with Catholic Charities, the organizations are Beyond Housing, ACORN, Better Family Life and the Urban League of Metropolitan St. Louis.
The mortgage crisis hasn't been as severe in the St. Louis area as it has been in other parts of the country, particularly California, officials say. The local housing market is estimated to have lost about 7 percent of its value.
Wallensack said the problem in St. Louis County may be far worse than in the city of St. Louis.
The estimate is that each foreclosure may cost a community as much as $78,000.
Individual donations of about $1,500 would save many homeowners, Wallensack said. The plea for donations has gone out to area churches and organizations.
But she said in some situations in which payments have increased too much, nothing can be done, and people have to walk away from their homes. The task then is to find alternative housing
"Our job then is to provide the fastest, softest landing possible," she said.
