Four affected by foreclosure discuss Obama mortgage plan

— -- President Obama proposed help Wednesday for up to 9 million struggling homeowners. From those who've lost their homes, to those looking to buy, these people say they hope this points the way out of the housing mess.

Struggling to keep her home

DETROIT — Stacy Ruddy can do more than most people. She can move tons of dirt, lift columns of steel and dig a foundation.

But she can't control the economy or the weather. So the Taylor, Mich., resident finds herself unemployed for the winter months of most years, laid off from her job as a heavy-equipment operator working on road and construction projects.

As a result, Ruddy, 37, is often behind on the $1,032 monthly mortgage on her two-bedroom, 1,000-square-foot house. After being laid off in November, she made her last monthly payment in December.

Now, she's two months delinquent and facing foreclosure on the house she bought nine years ago. And she's looking to President Obama for help he's offering homeowners such as her.

"I hope (the president's plan) will help me get the bank to give me a break — maybe put what I owe at the end of my mortgage, instead of having to come up with it now," Ruddy says of her 30-year fixed mortgage. "I have no problem paying the bank back. I don't want a free ride."

In the meantime, she's working with a local homeowner-assistance program to try to lower her 7.5% mortgage rate and postpone foreclosure.

Ruddy has looked for a job during the winter months, but they likely pay less than the $724 in unemployment benefits she gets every two weeks. When she does work again, she'll make enough — between $25 and $32 an hour — to get caught up on her mortgage. Her fear, though, is the economy may not bounce back and reinvigorate the construction industry.

"All I do is sit at home and think about my bills," she says. "I wonder, 'What can I rearrange? Who do I not pay this month?' "

She has plans for the home: new drywall in the kitchen and family room, and a garage out back. But first she's got to figure out the mortgage.

"I really don't want to move back in with my mother. I worked hard for my house. I love it here," she says.

By Kathleen Gray of the Detroit Free Press

Is now the time to buy?

FORT MYERS, Fla. — Jaclyn Bishop is looking at her community of Lehigh Acres in a different light.

Where others see plunging property values and rampant foreclosures, she sees opportunity.

"I figure if I can get my hands on a house now, I'll have a great investment in 25 years," Bishop, 21, says.

Bishop lives with her mother and brother while juggling a waitressing job and studies at Edison State College in Fort Myers. She wants to buy a home with her boyfriend, who works in tomato farming.

A combination of bargain house prices and a federal tax credit offered to first-time buyers like her in President Obama's economic stimulus plan that was signed on Tuesday may help her achieve her dream.

The tax credit, ranging from $500 to $8,000, "sounds pretty good," Bishop says. Her biggest obstacle to buying now: "Money," she says. "I'm a waitress. It seems business gets slower and slower."

But home prices continue to drop. The appraiser's office for Lee County, Fla., says property values in Lehigh Acres fell 17% last year, and could drop 40% this year.

Bishop recently took a "foreclosure bus tour" of new homes.

One caught her eye. It was "the newest looking," she says. "You could smell the fresh paint on the wall."

By Laura Ruane of TheNews-Press in Fort Myers

Mom says she lost home on broken promises

PHOENIX — As a title clerk for an Arizona auto dealer, Doris Cervantes thought she understood financing.

So Cervantes, 25, a single mom, borrowed money on her house to go on maternity leave and wound up losing her home. Cervantes says she purchased the residence in the Phoenix suburb of Peoria five years ago at age 20. It cost $111,000. A year later, the four-bedroom house was appraised at $184,000, and Cervantes refinanced, borrowing $126,000 against it. She says she had no trouble making monthly payments of $870.

In 2007, Cervantes became pregnant. She wanted to take a few months unpaid leave. So she filled out application papers for another refinance.

Cervantes says she balked when she saw her monthly payments would increase to $1,600. But, she says, the mortgage broker promised to help get a home-equity line of credit covering half of that amount.

"At first I said, 'No way,' " Cervantes recalls. "But then I believed they were going to help me."

She netted $6,000 on the loan — enough for several months at home with her infant daughter. But she didn't qualify for a line of credit, and got no help from the broker. Cervantes says she called the Better Business Bureau and U.S. Department of Housing and Urban Development to lodge complaints against the broker, but never heard back.

When money ran out, she walked away from her home of five years. "I just gave up," she says. "I was overwhelmed. I left and rented a condo." In a September foreclosure auction, the house sold for $30,000 less than the balance of mortgage debt. Cervantes says she isn't sure if creditors are after her for the loss. "I don't think I owe anymore," she says, "but I'm not sure."

Cervantes worked Wednesday and couldn't watch President Obama's mortgage relief address in nearby Mesa. But she says the government should help homeowners because it failed to stop dishonest lending.

"Somebody should catch that," she says.

By Dennis Wagner of The Arizona Republic

He hopes the plan saves his neighborhood

PALM SPRINGS, Calif. — After purchasing his home in 1997 for $240,000, Jim Franklin watched its value soar to about $900,000.

But unlike some of his neighbors, he decided to keep his reasonable mortgage and not get caught up in tapping the home for equity loans.

"I didn't go out and buy jet skis," Franklin, 53, says.

Some of his neighbors who did have abandoned their homes to foreclosure because they couldn't keep up their payments. As a result, Franklin has seen house values in his Palm Springs neighborhood of Ruth Hardy Park sink by about $200,000 in the last year.

He says he hopes President Obama's foreclosure plan will help turn things around — not because he thinks anyone should get a break, but because he's tired of watching people walk away from homes they owe hundreds of thousands of dollars on.

Franklin, who voted for Sen. John McCain, figures if Obama's plan will stop this, foreclosures will decrease and the economy — and home values — will stabilize.

The plan includes prodding the mortgage industry to modify home loan terms so that borrowers receive lower monthly payments.

About 70% of the 3,617 resale homes in surrounding Riverside County that sold in December were foreclosures, according to DataQuick, which tracks real estate activity.

Franklin says about half of the last 15 homes sold in his neighborhood were foreclosures. One vacant home was in such poor shape after a fire, and after homeless people lived in it, that the city demolished it in October.

Franklin says some people have second mortgages with interest rates up to 15%. These are the same people who shouldn't have been given a mortgage in the first place because they couldn't afford it, he says.

"People all assumed the price of real estate would continue to go up, and it didn't, and it doesn't," he says.

He'd like lenders to cut those interest rates in half, if not more. That would still be a good return for the lenders, he says.

But, he says, it's also up to the homeowners to call their lenders — and not head for the hills.

He says he knows a man who works in downtown Palm Springs whose pay was cut in half and who can no longer afford his mortgage. Instead of working with his lender, Franklin says, the man plans to just walk away.

"All people have to do is call the lender and negotiate," he says.

By Stefanie Frith of The Desert Sun in Palm Springs