Posted November 12, 2009

St. Vincent de Paul Conference sees more need, more requests for aid

By Lou Baldwin
Special to the CS&T

Thank you very much for the help you gave my family. It was a great relief that we had one less substantial bill this month (mortgage payment).

I am confident that St. Vincent de Paul himself, the patron of this parish ministry, would be very busy in today’s world. I never thought we would be in this place, but we are. The kindness of others is humbling. Thank you.

Richboro, Bucks County, true to its name, is not in an area of extensive poverty. But if you are a St. Vincent de Paul Conference located in a St. Vincent de Paul Parish, you are apt to get people needing assistance, including the family who wrote the above note.

“It’s not so much from our own parish,” said Gary Mueller, president of the St. Vincent de Paul Conference at St. Vincent Parish. “We refer them to their local conference for help when we can.”

Perhaps what is most striking about the assistance requests coming in during this recession is the number of people who are unable to cover their mortgage payments. It could be because their mortgage payments were increased or the family has lost income, maybe through unemployment or a new position which doesn’t cover the payments.

It is a national problem. According to RealtyTrac, the online service listing of foreclosures, 1.5 million homeowners received a foreclosure notice in the first half of 2009. Some will be able to satisfy their debt, others will not.

The St. Vincent de Paul Conference, which is supported by the parish poor box and other donors, does what it can to help.

Perhaps it will provide food assistance or assist with other bills so that the family can better concentrate on the mortgage payment. It also puts them in touch with appropriate government agencies and other experts including a realtor, a conference member who can assist them in getting the mortgage rate reduced or plan other alternatives to help them to get out of their financial difficulties.

“With one family we were able to take their $1,600 mortgage payment down to $985,” Mueller said.

And yes, at times they have actually written a check for the mortgage payment, but this is only if the family has a viable plan to straighten out their finances.

“My philosophy is we will support you if you have a plan,” Mueller said.

That plan may well mean the homeowner receiving assistance is beginning the process to downsize to a more modest dwelling where they can make payments on their own.

So far this year the conference helped five families who ultimately downsized, Mueller said. As a very last resort, where the family meets eligibility requirements, it can mean their applying for a reverse mortgage, a loan available to seniors where repayment is deferred until the owner dies, the home is sold or the owner leaves for elder care.

“We made 70 home visits this year and probably put in 800 service hours,” Mueller said. “We helped 120 people, some with food, some with furniture. While housing issues are not involved in most calls for the conference, financially, our biggest strain is rent and mortgage payments,” Mueller said.

Lou Baldwin is a member of St. Leo Parish and a freelance writer.

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What about a reverse mortgage?

First of all they aren’t for everyone. You have to be at least 62 to qualify.

“If you have other ways of solving your financial problems you should consider them first,” advises Walt Gephart, a broker with Acre Mortgage in Marlton, N.J.

Originally from St. Leo Parish in Philadelphia and now in Resurrection Parish, Marmora, N.J., he’s made reverse mortgages his specialty for the past six years and writes about 100 a year, half in Pennsylvania and half in New Jersey.

Typically, seniors he is working with still have a high conventional mortgage balance and are in danger of losing their home.

“My last half-dozen were all at least six months behind in their payments and facing foreclosure,” he said. “In a recent case they had health problems; the husband had cancer. They hadn’t made a mortgage payment since May. We were able to save their home for them.”

Under a reverse mortgage the homeowner borrows on the equity of the home and although they can use the money for any purpose, currently many are using the funds to pay off the delinquent mortgage already on the property. Unlike a home equity loan, payments accrue but are not paid until the property is sold, either at the owner’s death or entrance into an assisted living facility, at which time the loan becomes due.

For seniors who are unable to pay their mortgage this may be better than a home equity loan, because in that case they would have to make future payments which they may or may not be able to afford.

How much can be borrowed through a reverse mortgage depends on the age of the homeowners.

“If you are 62 you will be able to borrow a lower percentage of the value than if you were 72 because you will probably live longer,” Gephart explained.

The interest that accrues may be a fixed rate, which at this time is about 5.56 percent or based on a home equity line of credit, which is lower at the present time but could rise in the future.

Reverse mortgages have received negative publicity, Gephart concedes, and a good bit of it may be deserved. There are about 2,700 brokers registered to write them and 1,500 wrote their first one last year, he noted. Some are really in it for the money, not to help people. Although financial counseling is required before obtaining a reverse mortgage, not all counselors have sufficient experience, he believes.

Of course, if seniors borrow against their home with payment due after their death, it will negatively impact the value of their estate, but that shouldn’t be a consideration, Gephart thinks. If anything, adult children should be helping their needy parents with a delinquent mortgage or other expenses when possible.

“Senior citizens shouldn’t feel guilty; they earned their equity and should be able to enjoy it,” he said.

In any case, seniors in financial difficulties, as anyone else, should seek advice from reputable financial counselors before it is too late.

“It’s scary, often they don’t know where to turn,” Gephart said, “Some get to us too late. The delinquency has gone too far and the house is in foreclosure.”