Ron French / The Detroit News
December 14, 2007
DETROIT -- Armed with thick loan documents and thin hopes, desperate homeowners flooded into Cobo Center on Thursday to meet with lenders, searching for ways to stave off foreclosure.
About 4,500 people came to the forum, possibly the largest turnout to such an event in the nation, according to industry and government officials. More than 200 were lined up before the doors opened at noon, and a steady stream of the unlucky and the underfinanced continued until lenders closed shop at 8 p.m. They came in dirty blue jean jackets and fur-collared overcoats, clutching leather briefcases and paper bags brimming with mortgage records.
"I'm not expecting anyone to work miracles," said Chris Kraus, 37, of Waterford, who came to the forum with his wife and two children. "It's tough on everyone."
Kraus looked around at the long line of homeowners awaiting a chance to plead for their homes. "This is going to change everything."
The outpouring of financially troubled homeowners at the forum -- the first of its kind in Michigan -- punctuated the depths of the region's housing meltdown. Metro Detroit has one of the highest foreclosure rates in the nation. More than 70,000 homes in Metro Detroit have received a foreclosure filing since January 2006. The foreclosure rate set a record high in January 2006, and has increased sixfold since then.
At Cobo, homeowners sat at tables holding numbered cards, sometimes waiting more than two hours for their turns to talk to loan officers of the companies that held their mortgages. Representatives from 23 lenders sat along the walls of the ballroom, some pecking data into laptops, some listening intently as homeowners told their tales of lost jobs, bad luck and adjustable-rate mortgages.
Some cried. A few shouted. Many seemed numb and plaintive, willing to do whatever it took to save their homes.
James and Sarah Cagle brought two of their three children to help plead with HSBC officials to hold off a Sheriff's sale of their West Dearborn home. "My wife lost her job first, then I lost mine two months ago," said James Cagle, 28. He cleaned out the $3,000 he had in his 401(k) to pay the mortgage company, but that's only half the amount the couple are behind in payments. "I start a new job in January, but the sheriff's sale is Jan. 3," he said.
"We went to an FHA (Federal Housing Administration) office to ask what to do, and the lady said 'My advice is to move out of state,' " said Sarah Cagle, 27, as she began to cry. "We grew up here. We don't want to move."
The forum was sponsored by Michigan Attorney General Mike Cox, who brought 60 members of his staff to help run the event. Similar events in Ohio had drawn 500 to 900 people. "We planned for as many as 2,000," said Matt Frendewey, spokesman for the attorney general. "We're overwhelmed. You don't know whether to feel good or bad about it. You feel good that you're able to help so many people, but it's a stark reminder of how bad the situation is."
Dozens of bills are being considered in the state Legislature to reform the mortgage industry and offer assistance to those on the verge of losing their homes. But for the thousands attending the forum, those changes likely will come too late.
"The laws can't catch up quick enough to help all these people," Cox said. "But being here talking to lenders is a good way to move in the right direction."
The forum was the first time Michael Brown had spoken to his lender. Brown, 37, was three months behind on payments on his St. Clair Shores home. While hospitalized for two months with a spinal cord injury, Brown's mortgage adjusted upward from 7 percent to 10.5 percent, hiking his monthly payment by almost $500.
"I got behind and depression set in, and I stopped opening mail from the mortgage company," Brown said. The forum gave him the push he needed to contact his lender.
GMAC brought 16 loan officers to the forum, talking to more than 100 homeowners with GMAC mortgages. "This is our 82nd event like this (around the country), and this is the biggest," said Gary Neuman, director of a GMAC program geared at staving off foreclosures. "We've lost a lot of ground in Detroit. Basically, we (lenders) are locking arms and trying to hold things together.
"It's to our benefit to work with borrowers," Neuman said. "Then they don't have a foreclosure on their record and we don't have another vacant house on our hands."
Neuman estimated that GMAC would be able to keep 75 percent of the borrowers he spoke to Thursday in their homes by restructuring their loans.
Lillie Davis, 60, of Detroit was one of the first in line when the doors opened at noon, and emerged seven minutes later with a Monday-morning appointment with a loan counselor. She'd purchased her home in 1977 for $20,000, but through a series of refinances now owes $71,000.
After an initial teaser rate on her latest refinance reset to 10.9 percent, her mortgage payment rose above her monthly fixed income. Her mortgage company wasn't at the forum, but after meeting with a free credit counselor who promised to contact her mortgage company for her, Davis was all smiles. "The pressure is lifted a bit," she said.
At a nearby table, the Cagles were girding themselves to be rejected one more time.
"I was just waiting for the lady to tell us no," said Sarah Cagle. "But she looked up and said yes!"
HSBC restructured the family's loan, lowering the rate and extending the term. Monthly payments will decrease from $1,350 to $775. Best of all, HSBC canceled the Sheriff's sale that was just three week's away.
"I burst into tears and I hugged the lady," said Sarah Cagle. "I kept saying thank you. She told me she was supposed to go to her child's play tonight, but it was worth missing it to see the looks on our children's faces.
"It's the miracle we needed," Cagle said.
DETROIT -- Armed with thick loan documents and thin hopes, desperate homeowners flooded into Cobo Center on Thursday to meet with lenders, searching for ways to stave off foreclosure.
About 4,500 people came to the forum, possibly the largest turnout to such an event in the nation, according to industry and government officials. More than 200 were lined up before the doors opened at noon, and a steady stream of the unlucky and the underfinanced continued until lenders closed shop at 8 p.m. They came in dirty blue jean jackets and fur-collared overcoats, clutching leather briefcases and paper bags brimming with mortgage records.
"I'm not expecting anyone to work miracles," said Chris Kraus, 37, of Waterford, who came to the forum with his wife and two children. "It's tough on everyone."
Kraus looked around at the long line of homeowners awaiting a chance to plead for their homes. "This is going to change everything."
The outpouring of financially troubled homeowners at the forum -- the first of its kind in Michigan -- punctuated the depths of the region's housing meltdown. Metro Detroit has one of the highest foreclosure rates in the nation. More than 70,000 homes in Metro Detroit have received a foreclosure filing since January 2006. The foreclosure rate set a record high in January 2006, and has increased sixfold since then.
At Cobo, homeowners sat at tables holding numbered cards, sometimes waiting more than two hours for their turns to talk to loan officers of the companies that held their mortgages. Representatives from 23 lenders sat along the walls of the ballroom, some pecking data into laptops, some listening intently as homeowners told their tales of lost jobs, bad luck and adjustable-rate mortgages.
Some cried. A few shouted. Many seemed numb and plaintive, willing to do whatever it took to save their homes.
James and Sarah Cagle brought two of their three children to help plead with HSBC officials to hold off a Sheriff's sale of their West Dearborn home. "My wife lost her job first, then I lost mine two months ago," said James Cagle, 28. He cleaned out the $3,000 he had in his 401(k) to pay the mortgage company, but that's only half the amount the couple are behind in payments. "I start a new job in January, but the sheriff's sale is Jan. 3," he said.
"We went to an FHA (Federal Housing Administration) office to ask what to do, and the lady said 'My advice is to move out of state,' " said Sarah Cagle, 27, as she began to cry. "We grew up here. We don't want to move."
The forum was sponsored by Michigan Attorney General Mike Cox, who brought 60 members of his staff to help run the event. Similar events in Ohio had drawn 500 to 900 people. "We planned for as many as 2,000," said Matt Frendewey, spokesman for the attorney general. "We're overwhelmed. You don't know whether to feel good or bad about it. You feel good that you're able to help so many people, but it's a stark reminder of how bad the situation is."
Dozens of bills are being considered in the state Legislature to reform the mortgage industry and offer assistance to those on the verge of losing their homes. But for the thousands attending the forum, those changes likely will come too late.
"The laws can't catch up quick enough to help all these people," Cox said. "But being here talking to lenders is a good way to move in the right direction."
The forum was the first time Michael Brown had spoken to his lender. Brown, 37, was three months behind on payments on his St. Clair Shores home. While hospitalized for two months with a spinal cord injury, Brown's mortgage adjusted upward from 7 percent to 10.5 percent, hiking his monthly payment by almost $500.
"I got behind and depression set in, and I stopped opening mail from the mortgage company," Brown said. The forum gave him the push he needed to contact his lender.
GMAC brought 16 loan officers to the forum, talking to more than 100 homeowners with GMAC mortgages. "This is our 82nd event like this (around the country), and this is the biggest," said Gary Neuman, director of a GMAC program geared at staving off foreclosures. "We've lost a lot of ground in Detroit. Basically, we (lenders) are locking arms and trying to hold things together.
"It's to our benefit to work with borrowers," Neuman said. "Then they don't have a foreclosure on their record and we don't have another vacant house on our hands."
Neuman estimated that GMAC would be able to keep 75 percent of the borrowers he spoke to Thursday in their homes by restructuring their loans.
Lillie Davis, 60, of Detroit was one of the first in line when the doors opened at noon, and emerged seven minutes later with a Monday-morning appointment with a loan counselor. She'd purchased her home in 1977 for $20,000, but through a series of refinances now owes $71,000.
After an initial teaser rate on her latest refinance reset to 10.9 percent, her mortgage payment rose above her monthly fixed income. Her mortgage company wasn't at the forum, but after meeting with a free credit counselor who promised to contact her mortgage company for her, Davis was all smiles. "The pressure is lifted a bit," she said.
At a nearby table, the Cagles were girding themselves to be rejected one more time.
"I was just waiting for the lady to tell us no," said Sarah Cagle. "But she looked up and said yes!"
HSBC restructured the family's loan, lowering the rate and extending the term. Monthly payments will decrease from $1,350 to $775. Best of all, HSBC canceled the Sheriff's sale that was just three week's away.
"I burst into tears and I hugged the lady," said Sarah Cagle. "I kept saying thank you. She told me she was supposed to go to her child's play tonight, but it was worth missing it to see the looks on our children's faces.
"It's the miracle we needed," Cagle said.
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