Troubled homeowners need money, not counseling

Anne Levin
Guest essayist

In response to "Help is on the doorstep for stressed homeowners in N.Y." ( Speaking Out essay, June 30) : Help, according to this essay, means that Gov. David Paterson has announced that the Division of Housing and Community Renewal is seeking applications from nonpofit agencies to provide counseling and legal services for homeowners who hold subprime mortgages. The division will distribute as much as $25 million through the Sub Prime Mortgage Foreclosure Prevention Services Program. Of that, $20 million will be used for direct counseling; the rest will go toward training and support of those nonprofit groups.

Am I the only one who thinks that maybe the $25 million could be used to aid these families instead of forming groups to study what happened and then counsel those people.

As a mortgage broker in Rochester, I can tell you that refinancing these mortgages is the only answer. Not counseling and not legal advice. As one who has written many hundreds of mortgages over the years I just want to be able to help my customers stay in their homes. One way to do that would be to create real programs that will let people refinance — not programs for which they can never qualify.

Lenders will have to change some guidelines to their lending policies to work around these people instead of counseling them for "free" at the cost to taxpayers of $25 million. The problem with counseling is that the eventual recommendation to people with the sub-prime loans that cannot be refinanced is to have them file for bankruptcy and lose their homes in foreclosure. If we think taxpayers are losing now, wait until all of these bankruptcy filings and foreclosures. Our real estate market will be flooded with homes that now will sell for a fraction of their value and the value of homes in general will fall 10 percent to 30 percent as we now see happening in Florida and Nevada. And, if all these people file for bankruptcy, the creditors will lose billions of dollars and our economy will collapse for sure.

Levin is owner and operations manager of First Funding Network Inc. in Rochester.