JANESVILLE, Wis.-Just in time for the holidays, and before more members lose their homes, Blackhawk Community Credit Union here has placed a temporary halt on foreclosures, and put a manager in place to oversee the program.
The action, an extension of the federal Fannie Mae program, began Nov. 26 and will run through Jan. 9, 2009. The goal: allowing families to remain in their homes during the holidays while every viable financial option is explored, explained Lyle Wermund, BCC loan quality assurance and property control manager.
"I know one member who is grateful for the program because she was going to the sheriff's sale this morning," Wermund told Credit Union Journal on Nov. 26. "I had been working with her feverishly over the past few weeks to come up with a solution and we couldn't. It just got to the point where she asked how much longer she could stay in her home."
Looking At All Solutions
Wermund hopes the moratorium and new federal programs can help more members avoid foreclosure. The moratorium was extended beyond members with loans sold to Fannie Mae to those with Blackhawk-held loans in foreclosure as well. The CU will look closely again at its own internal programs to find solutions for those troubled borrowers, Wermund said.
One of the reasons the moratorium was extended to include portfolio loans was to obtain local news coverage. "We are trying to get these people who are facing foreclosure to communicate," Wermund said. "By extending the program to portfolio loans it gave us a reason to do a press release."
The local newspaper, two local radio stations, and the NBC affiliate in nearby Madison picked up the story quickly.
"Now we have other ways to quickly reach those members who may not have listened to the national news or scanned the Internet to learn about Fannie Mae's moratorium," Wermund said. "This really helped get the word out."
The press, in conjunction with letters sent to members facing foreclosure, immediately initiated calls and e-mails to Blackhawk.
"They're asking if we'll take the wolf away from the door, and more importantly, how can we help them. When people get behind on payments or face foreclosure, one of the common things they do is withdraw, which is the worst thing they can do," Wermund said.
Wermund is experienced at working with individuals facing foreclosure, having previously handled that role at another financial. With 40 to 50 foreclosures on its books, the $33-million credit union created a new position, property control manager, to address the growing problem.
Blackhawk has foreclosed on eight properties already this year. But that could end up being a small number with the economic problems this town faces, Wermund suggested.
An Accelerating Problem
"The problem is accelerating," he said, noting the pending closure of the GM plant that's been a big employer here for more than 50 years. Plant layoffs have already started and small businesses that support the plant have been affected, either cutting back or shutting down, Wermund explained.
Wermund stressed that the moratorium is not a PR stunt, and that Blackhawk Credit Union is looking into as many options as it can to move members out of foreclosure before the moratorium is lifted next year.
"I know of a couple members' situations we have looked at very closely," Wermund said. "Unless something really different comes out (from the federal government) there may be nothing we can do for them. At least they have the holidays to stay in their homes."
