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No Rockwell here

"No Rockwell here" Continued...

Issue: "Shattered dreams," April 5, 2008

The shame and embarrassment associated with mortgage delinquency keeps many homeowners from seeking help. Brothers Redevelopment, a nonprofit financial counseling firm, has established a foreclosure hotline in Colorado, but only a fraction of those in trouble avail themselves of the free service.

Zach Urban, who founded the hotline and has spent the last several years studying the foreclosure crisis in Colorado and around the country, told WORLD that the emotional state of homeowners in trouble runs the gamut from thoughts of suicide to abject denial, wherein folks simply refuse to open their mail. "Marriages and relationships become worn and tattered because of the frustration and strain on a couple during this process," he said. "There's a desire to place blame on one or the other as to who got them into the loan to begin with."

The issue of blame is no simple matter. Kathi Williams, executive director of the Colorado Division of Housing, assigns a 60-40 culpability ratio to lenders and borrowers, respectively. "We did a lot of things out of greed in this last housing boom that we shouldn't have done," she said, citing no-doc loans that required no proof of income or expenses. "Lenders are crying today that people lied about their income and expenses. But they were absolutely pushing a product that allowed that abuse."

Many Colorado lenders are paying for such irresponsible practices to the tune of $30,000 to $50,000 per foreclosure. That kind of comeuppance prompts some spiritual communities to adopt a victim mentality. Pastor Harold Hicks of Mount Carmel Community Baptist Church in northeast Denver believes all of the blame should rest squarely on lenders who invented products with graduating rates. "There's a very simple answer to all this," he said. "All lenders need to do is readjust the interest rates and keep people in their homes."

But that thinking does not emanate from a vacuum. Hicks is heavily interested in the enterprise of excusing irresponsible borrowing. An investigative report in the Rocky Mountain News last summer uncovered accusations from two former Mount Carmel members that Hicks tricked them into paying inflated prices for dilapidated investment properties. When the housing bubble burst, those properties went into foreclosure and brought financial ruin to Sherri Wrightsil and Deborah Richardson, both of whom had signed falsified documents for huge loan amounts at the behest of their pastor.

Hicks has refused to comment on the matter, which has now triggered an investigation from the Denver District Attorney's office. Sharon Daniels, who has worked at Dave Smith Realty across the street from Mount Carmel for more than 40 years, scorns the pastor's actions and any notion that minimizes the need for irresponsible borrowers to alter their behavior. Daniels will not work with clients interested in anything other than 30-year or 15-year fixed loans.

That old-school approach, once thought overly restrictive and antiquated, is resurging in Denver and throughout the state. At Colorado Homeless Families, an organization housing numerous former homeowners, director Connie Zimmerman preaches the lessons of hard work, budgeting, and delayed gratification that counteract an entitlement culture and spare people from buying more than they can afford. "If people don't want to be responsible and just want to blame the world, we can't help them," she said. "But some people just have to learn the hard way."

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