CLEVELAND, Ohio (AFP) — For the hundreds of thousands of Americans at risk of losing their homes because they cannot pay their mortgages, associations may be their last chance to keep them.
"I can't believe I signed it. I didn't accept that," Stephen Vasek, 40, says, his voice trembling as he refuses to even look at the mortgage contract he signed in 2006 and its towering interest rate.
Mark Seifert, executive director of the East Side Organizing Project (ESOP), a non-profit grassroots organization in Cleveland, Ohio, where Vasek is seeking help, seems unfazed.
"Sorry, but it's your signature, any judge will agree with the bank it's valid," Seifert says.
In the midwestern city, one of the hardest hit by foreclosures in the nationwide housing slump, a dozen associations are trying to prevent homelessness.
"When they first step in, we tell them we are not Zorro, what we could do and could not do for them," Seifert explained to AFP.
At another organization, the Cuyahoga County Foreclosure Prevention Program, director Mark Wiseman says staff play several roles.
"We are counselors, psychologists and social workers," Wiseman said in an interview.
"Keeping their home is the most difficult part of our work. Being foreclosed is very much an embarrassment," he said.
The associations are using an arsenal of weapons to combat the distress of a growing number of people facing foreclosure: group discussions to help overcome the shame, financial education courses and presentations on subprime mortgages -- the home loans given to people with bad credit.
But more importantly, the groups offer help in negotiations with banks and lending institutions.
With falling home prices and a credit crunch, the organizations are being flooded with stressed clients.
"A year ago, we hosted a group of about 50 people; a majority were African-Americans. Now we host a group of about 150 people," ESOP's Seifert said.
The people coming for help resemble the American melting pot, he said: "You have white, black, poor people, young people, seniors."
Such organizations say they have earned a go-to reputation among desperate homeowners seeking negotiations for improved terms from their lenders.
"We convinced lenders that it is in their interest to work out a troubled mortgage. A foreclosure costs more than 50,000 dollars on average," Jeanne Morton of the Cleveland Housing Network said in a phone interview.
Banks sometimes will offer to transform a delinquent adjustable rate mortgage into a fixed-rate loan and lower some interest rates to accommodate the borrower's income.
"As little as six months ago, 90 percent of workouts the lenders offered were forbearance agreements which give a borrower extra time to clear up missed payments," said Wiseman. "But they postpone problems without solving them. We saw the same people six months later."
Now there is a federal drive to stem the tide of US foreclosures. In recent months President George W. Bush's administration has been working with banks and lenders to help ease the crisis and keep people in their homes.
With the backing of ESOP, Judith and Michael Peters convinced Countrywide, the nation's largest mortgage lender, to lower their adjustable monthly payment of 1,250 dollars to a fixed payment of 785 dollars.
"I was skeptical. We've discussed 26 solutions with Countrywide since June and gotten no workouts -- they just wanted to throw us out," she recalled at the ESOP counseling session.
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