From the Memphis Daily News – Crye-Leike Launches Foreclosure Aid Effort
Monday November 24th, 2008
By ERIC SMITH | The Daily News
About a week ago, a woman called Ellis Rankin, an associate broker at Crye-Leike Inc., about one of his advertisements offering help with lease/purchase transactions and rental homes.
The woman needed a place to live, and as Rankin began asking her questions, she told him her home was scheduled for foreclosure in January. The woman, who lived in her house for 20 years, had fallen behind on her payments and figured there was nothing to do but look for a place to rent.
Rankin visited the woman at her house and suggested she call the bank about ways to avoid foreclosure. Rankin even spoke to the bank on her behalf, saying the woman wanted to stay in the home and would need some kind of loan workout or modification to get back on track.
After more phone calls, and some back-and-forth paperwork using Rankin’s own fax machine, the bank agreed to a workout – and a Memphis homeowner avoided foreclosure.
Rankin said it was a blessing the woman called him in the first place, but finding a resolution for the problem was simple.
“The main thing was getting a dialogue with (the mortgage company) and letting them know that she was still there,” Rankin said.
It pays to help
That kind of situation inspired Crye-Leike founders Dick Leike and Harold Crye to launch the company’s “Save the Dream” initiative, a grassroots effort that calls on agents to reach out to at-risk homeowners and help them prevent potential foreclosures.
“When it comes to houses, Realtors are the best economic advisers,” Leike said. “We need to take more of an active role there. If you think about it, sometimes our homeowners don’t want to tell us when they’re in trouble.”
The national Mortgage Bankers Association reports that 50 percent of at-risk homeowners don’t contact their lenders about a modification. With real estate professionals working the front lines, so to speak, Leike figures they can be the first line of defense against a growing epidemic.
“Maybe we can give them some ideas as to what to do,” Leike said. “I don’t think any real big push has been on to educate these folks as to what they should do in this case. That’s what our thoughts are on it. Here we have 1,100 agents in town and we’re doing a good part of the business here in town.”
As Rankin sees it, being in the real estate business makes him a stakeholder in the fight against foreclosure. So does being a resident of the city and a neighbor to those in need.
“If I can help someone before that happens, I want to do that because all of us are being affected by this,” Rankin said. “We think we’re not because we’re paying (our mortgages), but then it’s lowering our property values so it’s going to affect you sooner or later.”
Corky Neale, research and innovation specialist for the RISE Foundation (Responsibility, Initiative, Solutions and Empowerment), said workouts like the one Rankin’s client received are becoming more common as mortgage lenders look to reduce the number of homes they have to reclaim.
“Typically they’re reducing the interest rates, they’re freezing the interest rates where there was an ARM (adjustable rate mortgage), they’re putting some of that principal on the backend of that loan, saying, ?We’ll recover it when the property sells,'” Neale said.
Neale is supportive of those efforts, but he added that a grassroots-only campaign won’t get the job done – that more sweeping changes in the lending process have to be enacted. That’s something he and others are working on at the state level. Still, these measures are making a difference in Memphis neighborhoods.
“For some homeowners, they’ve got to get that help to begin working with their servicer and their lender,” Neale said. “From the homeowner’s perspective, all they can do is take care of their own business.”
Rankin likes the idea of real estate agents helping homeowners. It’s good for business, sure, but it’s also good for the community.
“(Foreclosure is) tearing down the fabric of the neighborhood,” Rankin said. “If we can show that we’re concerned about our neighbors, that we want to save their homes, that will eventually show the good faith that our company is not just concerned with selling your home but you keeping your home.”