Lenwood and Denise Shaver were thrilled after the birth of their first child in 2002. They had purchased their first home the year before, had a comfortable dual income household, and by most standards were living a good life.
Then, “After the first baby was born, I became pregnant again, and six months after the second baby I became pregnant a third time,” Denise explains. “So basically, we had three babies in three years.”
When the couple decided that Denise should give up her full-time job to stay home and raise the children, the family’s income decreased and they began to miss payments on their home. “We got about three months behind on our mortgage,” says Denise. “Because we had a very good record in the past, the lenders called us immediately to find out what was going on.”
Loss of income is one of the main causes of foreclosure, according to Kenneth Wade, CEO of NeighborWorks America. “In many cases people have no control over the situations which lead to foreclosure—no control over their loss of income or unforeseen medical bills.”
Unfortunately, lenders aren’t always interested in the life circumstances that lead to foreclosure. Making sure mortgage loan obligations are fulfilled is their primary concern. Still, homeowners can educate themselves and act before they get too far behind on payments.
The Shavers researched various agencies, initially to assist them with paying utility bills. By that point, they had already gotten rid of a car to trim expenses, Denise had taken a part-time job, and the couple refinanced to a lower interest rate, which reduced their mortgage payment to about $650. Eventually the Ohio couple contacted the Columbus Housing Partnership, one of 220 NeighborWorks America organizations that provide financial support, technical assistance, and training.
Through the partnership, the Shavers took part in NeighborWorks’ Foreclosure Prevention Program. Their counselor, Carolyn Einloth, says clients receive a maximum of $2,400 or three months of payments, whichever is less, to stop foreclosure. To be eligible for the program in Columbus, a client’s income must be 50% or less of the area’s median income—adjusted for family size—he or she must ensure that the lender will accept payment from the partnership.
But before getting aid, the Shavers had to have a budget that showed they could meet their monthly expenses. “Our counselor helped us make a budget so we wouldn’t end up in that circumstance again,” says Denise. “Columbus Housing Partnership gave us three months’ missed mortgage payments to catch us up. Our counselor told us it was a one-time deal.”
But in life, trouble can happen at any time.
“Unforeseen events happen to people in all communities,” says J. David Washington, president and CEO of Forbes Capital Group, who gives seminars on foreclosure prevention. “Not to make excuses, but people of all backgrounds can suffer from divorce, loss of work, and poor budgeting.”
A relative’s legal troubles pushed Cheryl Webster, 41, into foreclosure twice within the last two years. “I had a close family member who got into some legal trouble, and there were