“Every year our homeowner’s insurance would go up, so our house payment would go up,” Hawkins said recently.
She contacted her mortgage company and tried to get a loan modification, but that proved frustrating and difficult. After three years of trying she gave up, Hawkins said.
She started her own computer repair and website development business, Hawkins PC Solutions, in Piedmont in 2012, and her personal finances improved.
“Things have been great. I’m able to make the mortgage payments. Doing a lot better,” she said. Hawkins is now taking advantage of the current low interest rates and is refinancing her home.
Hawkins' story is a common one, with several hundred in the county facing foreclosures each year as the local economy continues its slow recovery after the Great Recession, which started in 2007.
There is free legal help for those facing foreclosure. Legal Services Alabama, a statewide network of nonprofit law offices that provide aid to low-income Alabamians, provides assistance to those in danger of losing a home to foreclosure.
The number of Calhoun County homes foreclosed last year dropped slightly from the previous year, but more homeowners lost their homes in 2013 than did in years before the recession.
According to the Calhoun County Probate Office, in 2005 there were 192 foreclosures in the county. That number jumped to 407 in 2010, at the height of the housing crisis, and fell slightly in 2011 to 348 foreclosures and to 349 in 2012. Last year 326 homes were foreclosed in the county.
“Things are better than where they were two years ago, but not as great as they could be,” said Denise Welch, an attorney at the Anniston office of Legal Services Alabama.
Welch recalled in 2010 when homeowners streamed through her office door.
“People would come in who were just getting behind, and then we’d have people that were at the end of the line,” Welch said.
Welch said help is available for homeowners just beginning to fall behind on payments, or those who are close to losing their home, but it’s best to ask for help as soon as problems arise.
“We can help homeowners assess what’s causing the problem in making their payments, help them determine if it’s a property they really want to keep and try to work with their mortgage company to come to a reasonable solution,” Welch said.
Leonard Zumpano, professor of finance at the University of Alabama and the chair of real estate economics for the Alabama Association of Realtors, said the major wave of foreclosures is over, but many continue to struggle.
Unemployment is down, which means homeowners are better able to pay their mortgages than during the worst of the recession, but housing markets typically rebound slowly, Zumpano said.
According to the Alabama Department of Labor, Calhoun County’s average unemployment rate in 2006 was 3.5 percent, and in 2010 rose to 9.5 percent. The county’s 6.1 percent unemployment rate in November 2013 remained nearly double the pre-recession rate.
“People got burned, credit ratings were hurt and they’re not going to be back in the housing market for a while,” Zumpano said.
Many homeowners still owe more than their homes are worth, and decide foreclosure is better than fighting to make their payments, Zumpano said.
“That’s probably still going on, and will continue to go on to a declining degree each and every year,” Zumpano said, but he believes the housing market will continue to slowly improve.
“I fully expect the housing market to recover, and you’ll get back to normal levels for your area,” he said.
Get help early
“Usually, when people get to a point where they can’t afford their mortgage they quit opening their mail,” Welch said. “If you come in at the very end there are very few things you can do to stop it. So we encourage people to come in early.”
The enormity of a pending foreclosure can be overwhelming, Welch explained, and working with mortgage companies can be tough, but being proactive is the best way to save one’s home, Welch said.
Homeowners working toward a loan modification should stay in frequent contact with their lender, she said.
“Even if they don’t think they need anything call them and make sure,” she said. “They’re not going to pick up the phone to call you.”
In July 2013 state Attorney General Luther Strange announced Legal Services Alabama will receive $1.1 million through the joint state-federal National Mortgage Settlement Funding program to help Alabamians who are fighting to keep their homes. The organization estimates that money will help about 4,000 families.
The number of homeowners helped at the Anniston office was not immediately available, but statewide the Legal Services Alabama aided about 3,720 with their housing problems last year, according to the organization’s website.
There are no income requirements to receive help through the Legal Services Alabama, but homeowners must apply to the program.
“It is very frustrating for the homeowner. It requires a lot of documentation. A lot of patience,” Welch said.
The key to navigating a foreclosure, Welch explained, is to not give up, to cut personal spending wherever possible and ask for help at the first sign of trouble.
Staff writer Eddie Burkhalter: 256-235-3563. On Twitter @Burkhalter_Star.