How to Save Your Home from Foreclosure The American home foreclosure crisis has been at a fever pitch for months now. Drive down any residential street, and you'll see unattended lawns and for sale signs. For more, we get a national perspective, then we put a human face on the issue.
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How to Save Your Home from Foreclosure

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How to Save Your Home from Foreclosure

How to Save Your Home from Foreclosure

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This is News & Notes. I'm Farai Chideya. We've got another listener favorite from 2008.

CHIDEYA: As Luther Vandross would say, "A house is not a home." But buying a house is often the first step, not only towards feeling settled, but also towards building the financial security to live out your dreams. That dream, however, has soured for many people who have been caught up in mortgage-lending troubles and others who feel they are being shut out of being able to buy.

So how do you get a house and keep it? With us today is Trevor Delaney. He's the personal finance director and editor at Black Enterprise Magazine, and Elena Borneman of Clearwater, Florida. She made a firm plan to own a home, and as a bonus, that plan helped her win Black Enterprise's Own Your First Home Contest. So Trevor and Elle, welcome.

Mr. TREVOR DELANEY (Supervising Editor, Black Enterprise Magazine): Thanks for having me

Ms. ELENA BORNEMAN (Winner, 2008 Own Your First Home Contest, Black Enterprise Magazine): Thank you.

CHIDEYA: So, Elle, let's talk about this contest. You were awarded 10,000 dollars as down payment money towards a house in this Black Enterprise contest back in October of last year. So what made you decide to enter? And how did you find out you'd won?

Ms. BORNEMAN: Well, I was at a point in my life where I had been working on preparing myself for mortgage readiness for about two years, and I felt that it was an opportunity where I could really take the next phase of my life through home ownership and actually set some long-term financial goals and build wealth for my family.

And I came across the article that was listed in Black Enterprise, and I just entered in. I decided to give it a shot, and they basically asked people to write essays based on what home ownership meant to them, and I gave a very heartfelt explanation of what it meant to me and why it was so important for me and my family.

CHIDEYA: I'm actually going to ask you to read us a little bit of your essay explaining why you wanted to buy a home, and also, you know, we'll talk more about this. But you had plans in place already. So can you read us a little bit?

Ms. BORNEMAN: Sure. There is a particular piece in my essay where I am giving a visual of a certain time in my life when I was very young and here it is. "By the time Victoria and Elizabeth were two" - those are my twin daughters - "I relocated us to Washington, D.C. We lived in Southeast D.C., the most inner-city project area, on Jasper Street, right next to the seventh district police station. Nothing but drug dealers, gun shots and ambulances hummed through the streets at night. That first year was the coldest winter ever. I remember it being so cold that tears would freeze on my cheeks."

CHIDEYA: It's powerful, and you wanted and have gotten better for yourself. What did you do? I mean, a lot of us have dreams. Some of us accomplish them. It sounds like you put certain things in place. What did you do?

Ms. BORNEMAN: Well, at that point, and that was about eight years ago, I really started trying to focus on developing my professional career so that I could increase my income, which is very important when banks are looking at debt ratio - debt-to-income ratios. So any opportunity that I got for professional development, I really jumped on it, and those opportunities led to constant relocation in and around the metropolitan areas in the state of Florida.

But I was very lucky to have some amazing leaders that wanted to transfer intelligence and really teach me the areas that I wanted to learn in. So my first step was really to increase my income, whether it was working one or two or three jobs at a time.

CHIDEYA: Well, we'll get back to more of your planning, but I want to go to Trevor. When you hear Elle, you obviously are hearing a woman who has a lot of determination and a lot of knowledge. Why did you start this contest? And what are the range of approaches people have when they tell you why they really want to buy a home?

Mr. DELANEY: Well, the contest was started actually three years ago. Elena is the winner of our third contest, and it was founded, really, because home ownership is so vital in terms of building wealth. Home ownership really accounts for a third of household net worth, according to the census, so it really is sort of a key part of the overall equation.

Her essay jumped out at us, out of more than a thousand entrants, and I think, as you pointed out quite accurately, her essay goes on and it's very vivid in terms of really demonstrating the commitment that she has.

And the range of essays, there were some that were certainly on par, in terms of really demonstrating the commitment that somebody has and an understanding of its importance to an overall plan, but I just think her overall seriousness and sort of dedication to trying to do this for her two young daughters really is what sort of drove us to select her.

CHIDEYA: I'm assuming that when you run this contest, you have a philosophy that says that people who enter and don't get the money are still winners, because they've tried to present themselves in a frame of mind that allows them to move forward.

What do you offer people who don't win? Once you publish the results and once you give your tips, what kind of advice to you give to people who may not be getting 10,000 dollars, but who still want to buy that home?

Mr. DELANEY: Right, you touch upon a key area. I mean, it is sort of - almost - the winner is almost a secondary purpose. I think the primary purpose, really, of the contest is sort of spreading the knowledge about home ownership and having folks understand its importance.

And really the role that it can play in not just their own building of wealth, but a key initiative here at Black Enterprises is really sort of getting the black community to understand intergenerational net worth and passing on what folks have been able to achieve. So I think really that is sort of the key message of the contest.

CHIDEYA: Elle, why don't you take us to the plan that you generated? You actually sat down and you came up with an actual plan for how to save money. You say that earning more was a big first step, but a lot of people always increase their expenses to whatever they're earning.

So if you make 5,000 dollars more next year than you did this year, you, you know, buy that new TV, you increase, you know, this, that or the other. I assume that you made some other choices. What were they?

Ms. BORNEMAN: Oh, absolutely. It's, you know, making a financial plan that works with your life plan is a challenge and it's got to be something that you have to be completely dedicated to. For me, I didn't have a lot of money to save at the end of the day, so frugal spending was very important, really strict budgeting.

And when I set the plan or set the goal or set the budget, I stuck to it, anywhere from, you know, cutting out coupons, to just being really aware of what type of community resources were out there and education was out there for me to tap into to improve upon my plan...

CHIDEYA: Where did it hurt the most? Let's just be real here.

(Soundbite of laughter)

CHIDEYA: Like, what did you miss the most when you decide to get kind of strict with yourself?

Ms. BORNEMAN: Probably the most difficult part was socializing. I think that we spend a lot of money going places, to fill up our time, spending money at shopping malls, you know. I think that, oftentimes, we just spend when we don't have to. And there are different things that, you know, triggers that I've come to learn that create those types of spending situations. So I really focused on my developing inner strength and relationships with my family and closest friends.

Because a lot of times, I think people will spend money when they are upset, or when they are really happy, or when they are lonely. And I really put that time in my life to repair and mend the relationship with my mother, my father, and then just really be as strong and as active in my daughters' lives as I possibly could, you know, whether it was, you know, being involved in school or after school programs or curriculum.

CHIDEYA: And you were someone who had your twins early, earlier than you might have otherwise planned...

Ms. BORNEMAN: Absolutely.

CHIDEYA: And had to sort of hit the ground running.


CHIDEYA: Well, in case you're just tuning in, we are continuing our housing series with a look at home ownership, and this, of course, is NPR's News & Notes. I'm Farai Chideya. We are hearing from Elle Borneman. She's recently bought her first home and was the recipient of the third annual Own Your First Home Contest by Black Enterprise.

And Trevor Delaney, the personal finance director and editor at Black Enterprise Magazine. Trevor, give us a few step-by-step items of what you need to do when you want to be "mortgage-ready," which is a term that Elle just used.

Mr. DELANEY: Right.

CHIDEYA: And then give us a set of steps when you are ready to start looking.

Mr. DELANEY: OK. Well, I think the first thing that folks need to recognize is that the home-ownership process is just that, that it takes - you really should plan for about a year, at least, to sort of position yourself and get yourself mortgage-ready, and that - a key first step is really understanding where you're at, in terms of your credit rating.

You can go to and get a free credit report. And that's different than your credit score. You have to pay a small fee to get your credit score, but you want to look at both. Your credit report will reflect all of your charge cards, you know, mortgage loans, car - not your mortgage loans, excuse me - but your car payments, any delinquencies, that kind of thing.

And you want to take - give that close scrutiny so that you can make any corrections and have that impact your score. And then you want to look at your score, because that will influence the rate that you can get on your mortgage. Though you want to start it by taking a look at that, and then making any corrective actions that you might need to, and start building your down payment.

A simple way to do that, for folks who are starting from scratch, is to get an automatic deduction from your checking account and move it to one of the online banks, and slowly accumulate some funds that you might then turn into CDs to earn a higher interest rate. You want to keep it relatively liquid...

CHIDEYA: Well, let me just stop you, because you're using some terms.


(Soundbite of laughter)

CHIDEYA: CDs, certificates of deposit.

Mr. DELANEY: I'm sorry.

CHIDEYA: Liquid meaning money that you can get out without paying a lot of penalties.

Mr. DELANEY: Right.

CHIDEYA: So it sounds like the plan is to, you know, to start saving the money, and then to try to put it someplace where you can earn some interest.

Mr. DELANEY: Right. A lot of folks, surprisingly, make this mistake of just sort of having it sit at a very low interest rate in a checking account, and that poses two problems. One, it's not working for you, and then, if it's right in your checking account, it's all too easy to dip into when you have that unexpected leaky faucet, what have you.

CHIDEYA: So say that you've reached the point where you are saving regularly. You have enough money for a down payment. Your credit score is good enough to get a good loan and not just a loan that will be exorbitant. When you start looking, or as you start looking, what are some of the things you should keep in mind?

Mr. DELANEY: Well, one of the things I think a lot of homeowners don't really explore are the home-buying programs in their area. If they go to the Department of Housing and Urban Development website,, they can find links to local programs in their state that offer assistance, particularly to first-time homebuyers, but homebuyers in general, in terms of educating them about the process.

And that may offer some additional financial guidance as well as just understanding the process. And they really need to understand who the key players are, in terms of what are the interests of a real estate agent? In terms of being driven by a commission, or what have you? Making sure that they have a quality lawyer to guide them through the process and can really protect their own interests.

And have - working with a financial professional, a banker, to really understand their mortgage, which is sort of the key thing we've learned out of this whole sub-prime situation, is that folks really didn't understand what the adjustable-rate mortgage would mean on a bottom-line basis, month-to-month, that, you know, my mortgage payment would go up three and four hundred dollars a month, or whatever the case may be.

CHIDEYA: Elle, when you bought your first home, and tell us - first of all, tell us about your home. What is it like to be in your own home?

(Soundbite of laughter)

Ms. BORNEMAN: It's complete just security, you know. That's what it really translates to, and a place where me and my family can start building a future long-term. It's a special place, and I've always tried to make a home wherever we are, but this just makes the big difference in our lives.

CHIDEYA: When you went in to look at mortgages and to sign papers, what did you look for? And were there any moments at which you felt, you know, I don't really know what's going on here? And if that happened, what did you do?

Ms. BORNEMAN: Well, having been in the homeownership industry for about six or seven years, I you know, I've had an opportunity, by working with the HUD Counseling Agencies that Trevor just mentioned, I've had an opportunity to help hundreds of people realize the American dream.

So having taken people step-by-step through that process, I was at an advantage, and knew what I needed to do and who I needed to speak with to, actually, you know, move from one step to the next. Basically, I contacted several different lenders that I had worked with in the past, with previous clients, to start shopping a mortgage and to see which mortgage product was most conducive with my financial needs and would help make that purchase the most affordable.

I was also involved in the First-Time Homebuyer Down Payment Assistance Program in Pinellas County, and city of Clearwater and city of Largo, so I contacted the individuals there and let them know that I was going to be interested in getting a down payment assistance loan, so that I knew that that would also help the actual purchase to create some more affordability...

CHIDEYA: Well, let me just jump in here.

Ms. BORNEMAN: Uh-huh.

CHIDEYA: What is a down payment assistance loan? Sounds intriguing and helpful.

Ms. BORNEMAN: Absolutely. Throughout the United States, local municipalities, through their S.H.I.P. and home dollars, will offer first-time homebuyers an opportunity to get assistance through a down payment assistance loan. And depending on where you are, there are different criteria based on your income and family size, the price of the home and repayment.

In my case, I have a - I received a $10,000 down payment assistance loan, which went towards my down payment, and as long as I do not sell that home, I will not ever have to repay that. So it's like a soft second mortgage, which was helpful in layering the finances to create the most affordable situation.

CHIDEYA: Well, there's plenty of good advice that both of you have given us, and there's a lot more to talk about. We'll continue to talk about it in our housing series. Elle, Trevor, thanks so much.

Mr. DELANEY: Thank you.

Ms. BORNEMAN: Thank you.

CHIDEYA: Elena Borneman is the recipient of the third annual Own Your First Home Contest, by Black Enterprise Magazine, and Trevor Delaney is the personal finance director and editor at Black Enterprise.

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