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Reaching out to prevent foreclosures

State banking regulators brought their foreclosure prevention roadshow to Buffalo on Monday, offering a full day of assistance to homeowners who are in foreclosure, at risk of foreclosure or experiencing problems with their lenders.

The Department of Financial Services brought a handful of mortgage foreclosure prevention specialists, bank examiners and its "mobile command center," setting up shop at Belmont Housing Resources for WNY from 10 a.m. to 6 p.m. A few housing counselors and legal services representatives were also present to provide help from local nonprofit agencies.

The goal is to help troubled homeowners avoid the loss of their homes, by directing them toward loan modification programs and other assistance for which they qualify, or helping them navigate the process.

However, no representatives of any lenders or servicers participated, so the program was not about getting homeowners into loan modifications on the spot.

Rather, officials said, it's about offering information and other help, facilitating communication with lenders and encouraging homeowners to seek out assistance early rather than waiting until it's too late. That means getting help as soon as trouble starts, instead of once they're already behind, unable to pay and unable to qualify.

"Many of the modification programs really work, but you have to qualify," said Superintendent of Financial Services Benjamin Lawsky. "A lot of people wait until it's too late. All of a sudden, the program they would have qualified for is no longer available If people are coming here and they're experiencing a financial crisis, these are the people we can help the most."

The state experts provided information about specific loan modification programs and also took complaints about lender or mortgage servicer abuses -- such as predatory lending practices or so-called "robo-signing" -- that the state would then investigate.

But officials had very few takers Monday, in large part because they gave very little advance public notice that the state program would be coming. Still, Lawsky said he wasn't deterred.

"I don't measure the success of it by the number of people served. It's getting the message out," he said.

Foreclosures have become a serious crisis in many parts of New York, particularly downstate, as significant numbers of homes have been seized by lenders after debt-burdened and cash-strapped borrowers defaulted on mortgages they couldn't afford.

In turn, that reduces property values, harms neighborhoods and burdens communities, as tax revenues fall, maintenance costs rise, and abandoned homes become targets of vandalism and crime.

Sandra Becker, senior housing programs manager at Belmont, noted that each foreclosure can cost a municipality $19,000 for boarding up and maintaining it.

"If your neighbor gets foreclosed on, it has big impacts not just on your neighbor," she said. "It has large implications for our neighborhoods, communities and quality of life."

In Buffalo, the problem is less of a sudden crisis than an ongoing problem, as most foreclosures stem less from loans that shouldn't have been made than from abrupt changes in borrowers' finances because of job loss, medical issues and divorce. Still, local nonprofit leaders say it's a big issue nonetheless.

Loretta J. Wojciechowski, of West Seneca, struggled with her mortgage and faced the imminent start of foreclosure because of a combination of health issues and unexpected home and car expenses.

The 48-year-old single mother, who has been disabled and unable to work since 2003, receives just under $1,200 a month in income from $845 in Social Security Disability payments and $289 in assistance from Belmont. But she had been able to afford her $69,000 mortgage from HSBC Bank USA, paying $542.78 a month on the 30-year loan with a 5.25 percent interest rate.

That changed after she had to pay for a new roof on her garage and repairs to her 1999 Honda. She tried to get a loan modification from HSBC on her own but was turned down because the bank said she had too many debts relative to her income.

So she turned to a housing counselor at Belmont, who contacted HSBC on her behalf and, within two months, got her monthly payment reduced to $427.85 for the next five years.

"This is a serious problem here. We're really thankful that the state is coming now to assist," said Elizabeth Huckabone, president of Belmont.

The statewide effort is part of the Foreclosure Relief Unit at the DFS. The agency launched the initiative in February and has taken it on the road to more than a dozen sites, mostly downstate, where there are high concentrations of homeowners in or at risk of foreclosure. Besides repeat visits to Long Island, the lower Hudson Valley and parts of New York City, the tour has visited Schenectady and Syracuse.

This was the program's first visit to Western New York, but Lawsky said it won't be the last opportunity. The state plans to return in about three weeks for a second visit, and then again sometime afterward, and he said it's usually the subsequent stops that garner more attention from homeowners.

In addition, homeowners can get the same assistance by calling the department's toll-free foreclosure hotline, at (800) 269-0990, from 8:30 a.m. to 4:30 p.m., Monday through Friday. Consumers can also file complaints online at