Brewerytown Community Advocates Save A Longtime Resident from Foreclosure

-From the December Newsletter of the African-American Business and Residents Association in Brewerytown

At a time when the city and wealthy developers are creating conditions for the removal of current residents from this historic corner of North Philadelphia, a 40-year Brewerytown resident has saved his home from foreclosure. This is the story of how he was victimized, how he survived, and how you can protect your home. Shortly after Riley Saunders turned 76 this year, he had to pack his bags, sell his furniture and await the arrival of the Sheriff, as an October 5, 2006 eviction date from his home approached. The only things I had left were my friends and prayer,he said. That, it seems, was enough, because Mr. Saunders never met the Sheriff and on November 7, 2006, he regained ownership of his home. As property taxes rise and city policy continues to favor the creation of luxury housing instead of affordable housing, current residents are facing mounting challenges to stay in the neighborhood.

Losing a home to foreclosure is one way residents are being forced to leave. However, the good and bad things that happened to Mr. Saunders provide a laundry list of what can be done and what must be avoided by residents, particularly elders, in their struggle to stay in Brewerytown. The reader will see that proper planning will protect virtually every resident from a date with the Sheriff.

The trouble for Mr. Saunders began when he asked one of his lender' customer service reps to draft his monthly mortgage payments through automatic deductions from his checking account. While Mr. Saunders is now unclear about all of the details, he recalls being certain that the deductions had been setup. However, they were not. At some point, he fell behind in his payments and he was threatened with foreclosure. He went to an attorney, who told him that the only way he could save his home was to file for bankruptcy. Reluctantly, he complied. Unfortunately, he fell behind on his bankruptcy payments and he was again threatened with foreclosure. He sought legal advice and was told to file bankruptcy once more.

Ultimately, he was not permitted to file again and his home was certified for a foreclosure sale to take place in December 2005. Out of desperation, Mr. Saunders responded to a letter from a company that promised to help him obtain financing to save his home. Their representative, one K. Bryant, actually made a house call. He assured Mr. Saunders that he would acquire the financing and asked Mr. Saunders not to work with anyone else. Mr. Saunders, who took the man at his word, complied. Less than one week before the scheduled sale, however, Mr. Saunders received a phone call from Mr. Bryant, who said I’m sorry, Mr. Saunders, but I tried everything I could and I can’t find a loan for you.

Mr. Saunders had run out of options. His home was sold back to the lender at the foreclosure sale. Normally, a foreclosure story ends there. But, that' where the friends of Mr. Saunders and his constant prayers took center stage.

Mrs. Judy Chapman and Mrs. Bobbie Tyler, long-time friends of Mr. Saunders and core members of AABRA, told him to come to the AABRA offices at 2836 W. Girard Avenue to see if there was anything they could do. Mr. Saunders met with AABRA President, Al Alston, who immediately contacted the lender to see if a deal could be worked out. The lender explained that they had foreclosed only as a last resort. They said that Mr. Saunders had never completed the paperwork for a payment arrangement. They stated that the only assistance they would be able to offer was a possible sale back to Mr. Saunders – provided that he could find another lender. They referred all further communications to their agent, realtor Kathy McDonald, and their attorney, the noted foreclosure specialists Phelan Hallinan & Schmieg.

Upon further investigation, Mr. Saunders said he couldn’t recall any negotiations over a payment plan and could not recall any discussion of Pennsylvania' foreclosure prevention legislation, known Act 91. Act 91 requires residential lenders to offer payment plans to borrowers who fall behind in their mortgage payments before foreclosure can be authorized. Mr. Saunders insisted that none of his attorneys ever informed him about Act 91. Maybe they just wanted to take my money as part of a bankruptcy, instead of helping me to get back on track,Mr. Saunders concludes.

While seeking alternate financing, Mr. Alston accompanied Mr. Saunders during final attempts to seek assistance from other non-profits. It became clear to Mr. Alston that there was a cottage industry of organizations who claim to specialize in helping the elderly and low-income save their homes, but appeared to be doing little more than collecting government grants. One of these groups even let their friends know about the plight of Mr. Saunders and an unscrupulous individual telephoned Ms. McDonald in an attempt to buy the home from under Mr. Saunders, recalls Mr. Alston. He added Fortunately, the property was not yet up for sale to anyone but Mr. Saunders.

Finally, Mr. Saunders turned to the Bank of New York in a last-ditch attempt to obtain financing. Mr. Saunders met Ms. Julie Lobacz, a reverse mortgage loan specialist. That' when the prayers kicked in,according to Mr. Saunders. In a reverse mortgage, there is no monthly payment. Instead, the senior citizen borrower receives payments from the lender. Upon the senior' death, the senior' heirs will be responsiblr for either repaying the loan or selling the property. Mrs. Lobacz recalls This was a very challenging loan because Mr. Saunders, technically, did not own the home any more. And, you can’t do a reverse mortgage under the program he needed unless the borrower' name is on the deed.

Through extraordinary work by Ms. McDonald, Ms. Lobacz, AABRA and Ms. Megan Giffin, a closer with the title company Land Services of Pennsylvania, a means was found where an agent would reacquire the property for Mr. Saunders, thereby opening up the opportunity for a reverse mortgage. Ms. Giffin noted that This was one of the most complex deals we’ve ever completed, but knowing that Mr. Saunders has his home back makes it all worthwhile. Mr. Saunders went to closing on his home at the offices of Phelan Hallinan, which graciously called off the Sherriff for one month to facilitate the title transfer and new mortgage.

Neighborhood institution Ms. Haines Theoplinlus, told AABRA Update! I remember when his mother bought that home almost 50 years ago and I remember when he got married there. This neighborhood wouldn’t be the same without Riley. Him staying is an answer to our prayers! Mr. Alston offers There were so many twists and turns in this year-long effort to reunite Mr. Saunders with his home that logic and reason alone can’t explain why he prevailed. He' got a few guardian angels looking over his shoulder.

But, the real lesson here is that we must not let our seniors get to this stage. We have to get the word out about how to prevent foreclosure.There are numerous lessons that can be learned from the circumstances that confronted Mr. Saunders. AABRA will host seminars to share some of this information. Here are a few of the lessons: 1. If you ever get behind in your mortgage, stay in touch with your lender. Don’t avoid the annoying phone calls, tell them about your hardship and when you expect to be able to pay.

2. Always open your mail from your creditors so you are aware of the status of your mortgage and other loans.

3. If you fall far enough behind in your payments, one of those letters will be an attempt to setup a payment arrangement under Act 91. This is your best chance to avoid foreclosure. Follow the instructions you will receive. Remember, when preparing the list of income and expenses for your lender, you will only get payment arrangements if you demonstrate that you can make reasonable payments and that your financial situation is temporary (health related, etc.). RESIST the temptation to say that you have no income!

4. If anyone sends you a letter offering to assist you, tell them NO. They learned about your situation from public records and are likely interested in owning your property.

5. If you cannot make payment arrangements or fail to complete the arrangements properly, then you will be vulnerable to a foreclosure sale. You will have limited choices to stop the sale, including: (a) paying the arrears and significant attorney' fees; (b) refinancing the property; (c) declaring bankruptcy. Legal fees will generally be $2,000.00 - $5,000.00. Refinancing will be difficult, due to your credit issues at that point. Declaring bankruptcy is a one-time delay tactic that will destroy your credit in the short-term and may ultimately cost you your home if you don’t improve your circumstances after filing. Still, one of these options may be right for you.

6. If you are a senior, one path is to obtain a reverse mortgage. As long as you apply months before any foreclosure sale, it will give you a chance to hold onto your property. Of course, it will also force your heirs to have sufficient credit and income to refinance, should they wish to obtain your home when you pass.

For more information see www.aabra.org