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SCOTT JAGOW: The foreclosure notices are really starting to add up. Last month, one out of every 450 homes received one. And it’s happening in every kind of neighborhood. But certain communities are suffering more than others. A recent study predicted that African Americans could lose up to $90 billion from foreclosures. As Jenee Darden reports, some people are getting help from an unexpected source.
Jenee Darden: It’s barely 8 a.m. in Inglewood, California, and beautician Laurie Parker is already finished with her first client.
Parker is all smiles this morning. You wouldn’t know a few months ago her home was on the brink of foreclosure.
LAURIE PARKER: Well, not knowing anything about the process, I did a re-fi a little earlier than I was supposed to.
In 2003, Parker bought a townhouse with a 30-year fixed mortgage. Over the next five years, she refinanced twice and her mortgage payments jumped from $1,500 to $2,400 a month.
PARKER: From then it was a downward spiral.
She fell behind on her payments, and in April her lender started foreclosure proceedings. Parker, an African American, turned to her church for help. Yeah, you heard right.
PARKER: I took the papers to people that I trusted.
Parker attends Center of Hope in Inglewood. It’s part of a growing number of predominantly black churches around the country working with banks to help members stay in their homes.
LARRY REED: In troubled times people go to church. In troubled times black folks go to church.
That’s Larry Reed. He helps run the nonprofit Los Angeles Neighborhood Housing Services. It’s working with Center of Hope and other churches.
REED: For a lot of people their only source of counsel that they feel that they can count on is their pastor. So going through the churches we will be able to reach all those folks who are having problems or questions with their mortgage.
Pastor George Thompson recently led a foreclosure workshop at his church, Faithful Central, in Inglewood. Thompson is also a financial consultant who travels the country speaking at black churches about money management. Earlier this year, he met with other black pastors to hammer out a plan with banks on reducing foreclosure in the black community.
GEORGE THOMPSON: The bank wants to educate people, but let’s be realistic right now. Sending mail to people and telling them that you’re late and can you please pay? That’s not working.
The subprime mortgage meltdown has hit African American communities hard. The Federal Reserve reports that more than half of all mortgages issued to African Americans in 2005 were financed through risky subprime loans. That’s compared to 17 percent for whites.
Arna Fulcher directs Center of Hope’s foreclosure prevention program.
ARNA FULCHER: Right now we’re looking at about, mmm, maybe one in every eight or nine homeowners are approaching foreclosure or have notices of default of some kind in our community. And that’s an alarming number.
So alarming Inglewood officials are putting notices for the church’s foreclosure clinics in residents’ water bills. Laurie Parker heard about one of the clinics and brought in her loan papers.
PARKER: They looked at it and they were like, “OK, this is not a good loan.”
Arna Fulcher says Parker is one of more than 100 people her program has counseled since the beginning of the year.
FULCHER: Basically, what we do is we try to help the banks do what are called rewrites of the existing loans or workouts. Which is where they will come up with another workout plan for how they can refinance the property and get another payment cycle in place.
As for hair stylist Laurie Parker, her financial counselors arranged a deal where she could stay in her home while the lender tried to sell it. She will have to leave soon, but she’s leaving with some peace of mind.
PARKER: I was one of those people that was ready to say, “You know what, it’s gonna be a foreclosure. And I’m so glad that I didn’t do that, because you know, now, I have a buyer and I can walk away without a foreclosure on my record. You know, I might not walk away with a lot of money in my pocket, but that’s not even important.”
Center of Hope will be busy for some time to come. Arna Fulcher says more adjustable rate mortgages are scheduled to reset in the next six to eight months.
I’m Jenee Darden for Marketplace Money.
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