Joanne Lohuis was on the verge of losing her Swissvale home. Her long-term unemployment benefits had run out two years ago and she could no longer make her $650 monthly mortgage payments.
The situation became more desperate each month. After about four months, the bank served her with a foreclosure notice and moved to seize her 1,250-square-foot home.
“For a minute, I felt like giving up,” she said. “I had been trying to keep everything together for so long.”
Then she found out about a foreclosure prevention program run by the Allegheny County court system known as the Save Your Home program.
Her lender — Dollar Bank — was not inclined to modify the mortgage because she didn’t have a steady income after being laid off from her full-time job as a business technical analyst. Seven years after the layoff, she had never given up looking for another full-time job. But the only work that came her way was either contract work or part-time gigs.
For two years, the court kept the bank from foreclosing.
Ms. Lohuis still hasn’t found a full-time job. Yet her situation turned around in June when she turned 62 and qualified for a monthly Social Security check.
Dollar Bank accepted her Social Security income for a mortgage modification. The bank agreed to keep her mortgage at $650 a month and put the $12,000 in past due payments at the end of the loan, which she will be able to refinance when the time comes.
“If I didn’t have Social Security, I would not have had a regular income even still and I would have lost my house,” she said. “People say I’m losing by taking my Social Security early. I disagree. Reaching age 62 saved my house. And being in this program kept the dogs off.”
Spurred by crisis
Home losses in the Pittsburgh region hit a peak of 2,834 homes in 2006 due to a mortgage foreclosure crisis that steamrolled through this area in the early 2000s.
The Save Your Home program, which is a specialty court, was established through an administrative order in January 2009 by Allegheny County president Judge Joseph James as the alarming number of foreclosures sparked an effort by several government agencies — including the Allegheny Sheriff’s Office — to help families save their homes.
Between 2013 and 2018, a total of 2,462 foreclosure cases were enrolled in the program and 272 of those cases are still active.
Of those that have been closed, most of the cases — 509 — have been removed from the program because no agreement was reached; 403 cases ended with loan modifications; 406 of the defendants failed to appear in court; 175 defendants had their original loans reinstated; and in 31 cases the defendants paid their loans in full.
Foreclosures here and across the nation have been steadily declining since the financial crisis. But foreclosures don’t ever entirely go away. Three years ago, the duty of presiding over the Save Your Home program was transferred to Judge John McVay Jr. of the Court of Common Pleas Civil Division.
He still sees a need for the tools crafted during the crisis.
“The big power I have is to stop the foreclosure and see what we can do to help the homeowner,” Judge McVay said. “We wholeheartedly believe this program is a success.
“I don’t know if we are saving more than we are losing,” he said. “I would roughly categorize it at about 40%. But these are homes that would have otherwise been lost. Do we want to do better than 40%? Yes. But I still think it’s positive.”
Every story is different
Monroeville resident Julie Mathias fell behind on her $974 monthly mortgage payments after a series of health and financial setbacks.
For a while, it seemed as though life was throwing one curveball after another. She needed brain surgery. She lost her steady job. Her son was laid off from his construction job. Things in the house began to break. The medical bills piled up. There were three grandchildren to feed.
But now everybody is back to work. She receives a disability check and cleans houses on the side. Her son has a new job and her daughter-in-law found work as a receptionist. Ms. Mathias’s mortgage lender — PHH Mortgage — has granted her a modification and she is able to make payments for the first time since last summer.
“We had a chance to do the paperwork, get back on our own feet and get back to work,” she said. “It’s great the county does this. The bank seems to want to work with us, too. They don’t want our house.”
Lorren Allen, 59, of Penn Hills, fell behind on her mortgage by a year after she dropped out of the workforce to care for her husband,who suffered three strokes and which put him out of work.
A sheriff’s deputy served her with a foreclosure notice late last year. Inside the packet of papers that came along with the foreclosure documents, she found information about the Save Your Home program. She signed up and was able to plead her case in front of Judge McVay.
“The judge is very sensitive to people’s plight,” she said.
Ms. Allen’s earning potential was limited as a full-time caretaker for her 74-year-old husband. When his medical condition turned around, the marriage broke up. That is when she went back to work for the Lyft ride-sharing service. The income was enough to qualify her for the mortgage modification.
The tough calls
Judge McVay, a former Family Court judge, said he has had to make some tough decisions when the homeowners are not able to find work and there is no foreseeable improvement in their financial situation.
Realistically, he said, there has to be something on the table to help save the home or to be explored.
“A person’s home is usually their major financial asset and when that’s lost, it’s not only a personal tragedy, but it has ripple effects throughout a community,” Judge McVay said.
He typically wants to know if the defendant believes the situation will improve or if there are other family members who can help with money. He can’t order banks to change their loan terms.
Sometimes, the foreclosure goes through.
“The tab is running, and by holding them in that program without a foreseeable realistic resolution I’m not doing them any favors,” the judge said. “I’ll do it because I don’t want them on the streets. But sometimes the situation is such that I think I’m better removing the stay and allowing the foreclosure to proceed.”
Judge McVay said when it is clear that a family cannot afford to stay in a home, another option he has is to stay the foreclosure process long enough for them to sell it.
“I think giving people time to rearrange their lives gracefully by selling the house and getting whatever equity they have in the house back is financially positive rather than having the bank take it,” he said.
Collecting the financial details
Ms. Lohuis said she was initially contacted by someone from the Urban League of Greater Pittsburgh. The organization counseled her on the program, helped her with the paperwork and showed up with her for every court hearing.
The Urban League, Action Housing and Advantage Credit Counseling are a few of the county agencies that walk people through the process. No one is required to participate and only people in danger of losing owner-occupied homes are eligible.
Richard Morris, a housing counselor at the Urban League, said the first thing he does when meeting with new clients is get a complete picture of their financial status to submit a package to the lender.
He asks for all sources of income, tax statements, bills, budgets and a credit report. He needs to know if there are children in college, if the homeowner owns a business or if other family members in the house can contribute to a mortgage.
“Essentially, the loan modification package requires the same information as getting the mortgage in the first place,” Mr. Morris said. “The underwriter is trying to determine if the homeowner can afford the modification and whether or not they are a good risk.”
It could take several court hearings before a loan modification agreement is reached. During that time, paperwork sometimes become outdated and needs to be resubmitted. Some circumstances, such as jobs, health and marital status, also could change.
The only lawyers that typically show up with the defendants are bankruptcy lawyers. Judge McVay wants to change that by starting a pro bono program for Save Your Home using law students and a licensed attorney to supervise them.
“We mainly serve as advocates for the homeowners,” Mr. Morris said. “We are there to encourage them to stay on track, convince the lenders to remain patient and convince the judge to give us more time. If the judge sees no progress, he will allow the lender to foreclose.”