| Congressman Jim Matheson and Commissioner Mike Milovich discuss the housing problems facing Utah. |
With housing foreclosures rising around the nation, United States Congressman Jim Matheson visited Carbon County on Tuesday to discuss the matter with local real estate lenders, government officials and residents.
“There is a financial literacy problem in the country as a whole right now,” said Matheson. “I didn’t want to come down here and give a big speech, I wanted to come down here to listen to what is going on here in Carbon County.”
Matheson began his visit by meeting with a panel of bankers, lenders, real estate represntatives and local officials at the Southeastern Utah Association of Local Governments building on Carbon Avenue.
Matheson met with Frankie Etzel of Etzel Realty, Mike Milovich of Eastern Utah Community Credit Union, Erroll Holt from Zions Bank, Kathy Fausett from the Bank of Utah, Delynn Fielding from Carbon economic development and Aaron Scherb who acts as Matheson’s assistant on housing policy.
Emery County was represented by Lou and Jo Sansevero.
The department of workforce services, vocational rehabilitation and the Utah State-College of Eastern Utah extension were also represented.
It was the contention of all lenders in attendance that the national rise in foreclosures had not yet effected Carbon County.
Milovich attributed the lack of local foreclosures to the safe lending practices followed by local lenders.
“Buyer education is a problem all lenders face. I see people come in with a 75 percent debt to income ratio and they don’t understand why they can’t get a loan,” said Milovich. “A lot of customers demonstrate that they don’t think or plan for more than two weeks out and then when a situation comes up they weren’t ready for they are in immediate trouble with their mortgage.”
Milovich’s comments were brought on by comments made by lender Kathy Fausett.
“Most people don’t even know how to adequately determine their debt to income ratio. They leave things out like clothing costs per month and what they spend for vehicle maintenance,” said Fausett. “They live from payday to payday so one missed check can send them into a tailspin. They are financed to the max.”
Matheson was pleased by the lending practices he observed, but was interested to know what the federal government could do to help alleviate the situation further.
“I really do feel that education of buyers needs to be a focal point of the lending process because some lending practices at the national level can seem predatory,” said the U.S. congressman. “I have seen loans come in where 30 percent of the total was tied to the closing costs.”
Fausett stipulated that she had also witnessed such practices, but was hard pressed to identify a solution.
“If you tell a customer you can’t give them a loan for a home that is out of their price range, they are out the door and on the Internet looking for a loan immediately. They don’t look at the fees, they just want what they want and they want it now,” commented Fausett.
The lender also stressed the importance of protecting one’s credit score from a very young age.
“I see young people come in with a credit card and a Maurice’s account and, when they miss a payment, they don’t think it’s a big deal,” continued Fausett. “But what they don’t realize is that their $10 Maurice’s payment accounts for half of their total credit at that point.”
Lou Sansevero of Emery’s economic development stated that the rural culture in Utah and Castle Valley specifically had saved many home buyers.
“We have had responsible lending down here and that has saved us,” commented Sansevero. “People here are, for the most part, not buying homes on speculation. They are buying them as dwellings.”
Suggestions discussed by the panel and outlined by Matheson’s office to help avoid problems with home mortgage foreclosure included:
•Not ignoring the letters sent out by a lender.
•Contacting the lender immediately upon recognizing financial trouble.
•Contacting a HUD-approved housing counseling agency for assistance.
•Not ignoring the problem.
“The further behind you become,” stated the literature passed out to attendees by Matheson. “They have options to help borrowers through difficult financial times.”
•Knowing a buyer’s mortgage rights.
“Find your loan documents and red them so you know what your lender may do if you can’t make your payments,” stated the housing resource guide. “Learn about the foreclosure laws and timeframes in Utah by contacting the state government housing office.”
From the local end, Frankie Etzel offered buyers some sage advice.
“If something sounds too good to be true, then it probably is,” quipped Etzel. “I also really recommend trying to do business with a local real estate agent because they will be there in person when you close on your loan and they will be there when you run into some problems with your mortgage.”
During the evenings town meeting, Milovich summed up the situation for local residents, again stressing the importance of a good credit score when purchasing a home.
Milovich recommended starting small with $500 secured loans that are paid off on time for Carbon County consumers sho are seeking to repair bad credit.
“That will be a good start and then you can work your way up to larger loans but something important to consider is that you have to continue to pay the rest of your bills while you pay on your new loan. And remember it took awhile to put your credit in the toilet, it is going to take awhile to get it out. The market is changing daily,” continued Milovich.
“There is going to be a tightening for all lenders. But if you have good credit, there is still money available locally for people to by homes,” concluded Milovich.