Getting out from under the foreclosure threat

Richard Tsong-Taatarii, Star Tribune

Fannie Riley, right, discussed her mortgage situation with housing counselor Chrissi Barber at a foreclosure workshop in north Minneapolis on Tuesday. Riley emerged from the workshop with useful information and more optimism about resolving her payment issues on the house she shares with her mother.

Workshops are offering borrowers tips on the process, advice on dealing with lenders and individual counseling.

By STEVE BRANDT, Star Tribune

Last update: April 22, 2008 - 9:57 PM

Fannie Riley left a borrower's workshop Tuesday evening in north Minneapolis more hopeful about staving off foreclosure than when she arrived.

"I learned a lot more than I knew before, and it was helpful," said Riley, 57, who owns a house on Lyndale Avenue N. "And I know that there are people going to bat for people."

Riley was one of dozens of people who streamed into the workshop during its first hour alone. An average of 150 borrowers have attended each of two earlier workshops held recently by the Minnesota Home Ownership Center in St. Paul and Brooklyn Park. They got tips on the foreclosure process, advice for dealing with lenders and individual counseling on their situation.

Riley has owned the house she shares with her 87-year-old mother for five years. She was doing fine on her $1,309 monthly payment until she needed to rearrange her work schedule to finish her coursework.

She's been working as a mental health counselor and graduated last month from her medical assistant training. But the "externship" she had to complete for school required her to cut back, so she's working only on weekends. That cut her paycheck, and she's now $4,000 behind.

"It's killing me. You hate to tell people you're behind in your bills," she said. "I went to school to better myself."

Riley caught a break at the workshop when she ran into Mike Christenson, the city's development director, who stopped by the workshop. He's the former executive director of the Allina Health Systems foundation, and has medical contacts galore. He immediately began making calls with an eye toward helping Riley find a job; she's also attending a job fair at her school today.

"I just need to get back on my feet and I can handle my mortgage," Riley said.

That's pretty much the advice she got from Chrissi Barber, the ACORN Housing counselor who conferred with Riley.

As soon as Riley can verify a better job with a bigger paycheck, she'll be able to negotiate on stronger terms with her lender, Wells Fargo. Barber said the most common relief that a borrower who can show ability to cover a mortgage can get is either a loan modification or a repayment plan. One merely adds the missed payments to the end of the mortgage; the other involves making an extra payment until she's caught up.

Whichever method, Riley is determined to hang onto the house. She estimated that she looked at 150 houses before finding one that offered two bedrooms on the first floor, so she could be near in case her mother needed help.

The picture wasn't nearly as bright for Glenn Oltman, who's trying to hold onto a fourplex near Broadway and Penn Avenue N., where he lives. He's already facing an interest-rate reset that will add a couple of hundred dollars monthly to the mortgage on the fourplex, an increase he can't afford.

Even worse, he can't rent the other units in the building until he resolves a permit dispute with city regulators. He's got a bad back and he's making just $900 monthly in disability payments.

Counselor Bettie Foster-Crowe told Oltman his prospects for qualifying for accommodations from his lender will be difficult until he can generate enough money to cover the monthly payments.

Steve Brandt • 612-673-4438

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