KINGMAN - When Keith Ferguson bought his house in Bullhead City in 2005, he paid $140,000 for the dwelling appraised at $200,000.
But when the recession hit several years ago, Ferguson struggled to make mortgage payments of $616 each month. The 57-year-old construction worker received fewer calls for jobs until they were non-existent, went through the small amount of money in his bank account and was borrowing from friends to make ends meet. Even though he recently found a part-time job, it still wasn't enough to pay all his bills.
A postcard in the mail during that bleak time stopped Ferguson in his tracks. It offered him a chance to participate in a government program through Western Arizona Council of Governments in Kingman that would lower his principal and his mortgage payment, making it possible for him to keep the home he had worked so hard to improve. For Ferguson, it was an invitation he couldn't resist.
The program paid down the principal by $68,000 on Ferguson's house, which was appraised this year at $60,000 and had a balance owed of $127,000, with the stipulation that he didn't sell or refinance it for five years. And it lowered his mortgage payment to $335.57 a month, which is much more affordable to Ferguson in his current situation and when he retires.
"I didn't know what I was going to do before this came along," said Ferguson, noting the deal was finalized last week. "I've been so blessed lately. I got a job and took care of the house. My place isn't fancy but I love it and it has everything I need. I tried not to worry about what would happen, but I did anyway. This program has taken a burden off my shoulders."
WACOG last week was awarded $300,000 over the next three years by the Arizona Attorney General's Office to assist more people like Ferguson. The money will provide expanded free housing counseling services in Mohave and La Paz counties to homeowners facing a mortgage crisis and seeking to avoid foreclosure. WACOG offers a variety of human, social and economic services to low- and medium-income residents in Mohave, La Paz and Yuma counties.
The agency is one of 16 organizations in Arizona to split $5 million in housing counseling assistance from a national mortgage settlement reached with the nation's five largest mortgage loan services. They are Ally/GMAC, Bank of America, Citibank, JPMorgan Chase and Wells Fargo. WACOG is a Housing and Urban Development-approved local housing counseling agency.
The agreement, signed in February 2012, settled state and federal investigations finding that the five loan servicers engaged in unacceptable and sometimes fraudulent mortgage servicing and foreclosure practices that violated state and federal law. The settlement provides as much as $25 billion in relief nationwide to distressed borrowers and direct payments to states and the federal government.
It is the largest civil settlement reached by attorneys general since the tobacco settlement. Arizona's share is more than $1.3 billion for a variety of services.
Joyce Lucero, housing and financial literacy counselor for WACOG in Kingman, said the money will allow her to continue providing services for the growing number of homeowners facing financial difficulties, from losing their jobs to having to find lower-paying jobs. WACOG assists homeowners with several programs - Save Our Home AZ and Home Affordable Modification Program - that reduce the principal and lower mortgage payments.
"There are so many homeowners who are underwater still," said Lucero. "A lot of them bought houses from 2005 to 2008, when the housing market was high, and depending on their loan structure, their payments are increasing while their homes' values are decreasing. The housing market is coming up a little, but it's not where our clients need it to be."
Lucero said she provides free assistance with paperwork, from filling it out to faxing or emailing it, and will drive to the homes of disabled clients. Lucero said the agency has been helping homeowners for about five years, and she took over in October. Since then, she has provided housing and financial literacy counseling to about 67 clients in Mohave County, including Ferguson.
Lucero is offering two free financial literacy workshops to area residents. "Build a Better Spending Plan" will take place from 5:30-7 p.m. July 23 at the WACOG office, 208 N. Fourth St. "Understanding Credit" is scheduled for 5:30-7 p.m. Aug. 27 at the same location. For more information or to sign up, call (928) 377-1058.
She also administers the agency's "A Hand Up Program," which offers free consultations and educational workshops on financial management and budgeting, resolving mortgage delinquency or defaults, pre-purchase home buying, fair housing, predatory lending, non-delinquency post-home purchase and rental education.
"This money will help us reach more people," said Lucero. "We had our fingers crossed that we would get it and we're so glad we did because it will enable us to provide expanded services to the homeowners of Mohave County. A lot of people don't know about us.
"And just because the housing market has turned around a little bit doesn't mean the problem is gone. Because of this money, we can continue to assist those in need."
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