After 37 years of helping homeowners facing foreclosure, Solid Ground has closed its Mortgage Services. Launched in 1979, Solid Ground (then the Fremont Public Association) began providing mortgage default counseling and lender negotiations for homeowners at risk of losing their homes.

The program’s funding was tied to several fee-for-services contracts – but with foreclosures down significantly across the country, demand for services recently reached a 10-year low. In addition, funding didn’t cover all aspects of what it takes to help people resolve their situations. These and other factors made it more difficult for Solid Ground to meet contract goals – and we could not sustain the service without significant infusion of private dollars.

While we don’t have 37 years of records, we do know that from January 2001 through the program’s close at the end of June 2017, Mortgage Services worked with nearly 6,000 Western Washington households facing mortgage default, and more than 800 (mostly elderly) homeowners seeking reverse mortgages for those who are “house rich but cash poor.” Additionally, our counselors helped thousands of households understand, prevent and mitigate losses due to subprime and predatory loans.

In this article, several past managers share their reflections on the program’s impact over the decades.

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The growing years

Gretchen Bruce, Program Manager for the King Co. Dept. of Community & Human Services, served as Housing Counseling Manager from 1996 – 2005. She recalls, “Solid Ground was one of a pioneering group of reverse mortgage counselors from across the country. In addition to mortgage default, we were also full-on partners in an effort to increase homeownership by lower-income and marginalized communities.”

“Funded through the Community Reinvestment Act and working with [multiple local] partners, we created pools of eligible borrowers to step up into homeownership. Our role was to provide education to assure that homebuyers understood what happens if they fall behind on their mortgage.”

In the late ’90s, Gretchen began to see some disturbing trends that were a precursor of the major foreclosure crisis that hit about a decade later: “Older homeowners and people of color were being disproportionately targeted for loans with terrible terms. We tried to do what we could, in our own small pocket of the world, to address the burgeoning of subprime loans.”

In 2003, to address this trend, we became “fiscal agent and founding partner to the Seattle King County Coalition on Responsible Lending (SKCCRL), intended to educate the community on the dangers of subprime lending, and provide affordable legal representation to homeowners who had been duped into egregious subprime refinance loans.”

Solid Ground’s Supportive Services Manager, Judy Poston, came on board that same year, initially “to develop a Predatory Lending program to work with homeowners who were in foreclosure due to signing predatory mortgage loans — loans that had a lot of hidden clauses that were in small letters, or added to the loan documents after the client signed the loan documents. The language used in the documents was difficult for most of our clients to understand as many were elderly people of color or immigrants.”

“We were able to help several hundred individuals maintain homeownership.”

Working with other mortgage housing counselors, Judy says, “We were able to help several hundred individuals maintain homeownership. We partnered with an attorney who specialized in predatory loans; through this partnership, many people whose property had been unfairly foreclosed were able to sue the predatory lender and in many cases received compensation from the illegal foreclosure.”

The foreclosure crisis years

From about 2008 to 2012, our country experienced an unprecedented mortgage foreclosure crisis, driven by large-scale development, inflated housing prices, and vulnerable homeowners getting trapped in predatory, unsustainable, subprime loans. At the peak of the mortgage crisis in 2010, more than 30,000 Washingtonians lost their homes to foreclosure.

Donna Dziak was Housing Counseling Manager from 2007 to 2011 – so she had the unenviable job of figuring out how to best respond and support her team of three Mortgage Counselors as they were inundated with homeowner calls during this truly tumultuous time. As Washington state had a strong economy, the crisis hit our region in 2009.

“It was crazy busy” all of a sudden,  she says. “Banks kept creating loan products that anyone could be approved for, which compelled people to think they could get rich quick by buying up properties and flipping them as housing prices kept escalating. As more and more homes went into foreclosure, housing market prices started to plummet. With that went jobs and then peoples’ income and their homes.”

In response, Donna says, “Mortgage Services reinvented how we provided services, taking advantage of social media and using the agency webpage to push us over into the 21st century.” This included posting an online toolkit, in Spanish and English, that homeowners could download to start working with their banks right away without waiting for counseling. “We also created an online intake tool to triage the clients who had situations we could work with, and developed home exit plans for those who simply didn’t have the income anymore to support their mortgage costs.”

Donna says that thanks to good collaborations and relationships with other agencies and funders, the program continued to improve. “It was fantastic to be able to save a home for someone. I remember a man who had, under pressure, agreed to a terrible adjustable rate loan to pay for his wife’s medical bills. She was very sick and he was under tremendous stress. With the adjustable rate and taking an unpaid leave from work to care for her, he couldn’t pay his loan. We were able to help him with financial assistance and also a volunteer mortgage lender from the homebuyer education program.”

“…When we were able to save someone’s home, it almost seemed like a miracle.”

Unfortunately, the days of simple home loan modifications were over, and successes were few and far between. “Banks were not compelled to work with us. The way the loans had been bundled and sold, it was impossible to track down who actually owned the loan, which made it almost impossible to modify because the owner of the loan had to agree to the modification. So when we were able to save someone’s home, it almost seemed like a miracle.”

All Home Assistant Director Kira Zylstra served in various capacities on Solid Ground’s Stabilization Services team from 2011 to 2015, both before and after the foreclosure crisis. She remembers, “People were instantly grateful” when they connected with us, “because counselors gave them information they could actually use to understand their situations. It was powerful to have someone on your side; regardless of how successful it would be, they could get clarity and referrals.”

Solid Ground’s Mortgage Services “served fewer people, not because of lack of demand, but because it took a lot more time to provide the level of service needed. People brought in bags and bags of paperwork, but banks weren’t giving people the information they needed. Each case was more complex, difficult, and had many different dynamics at play – so it took a lot longer than normal to address people’s needs.”

“Finding solutions in these very complex cases often took up to two years.”

As mentioned above, it also became hard for the program to get reimbursed for services rendered. Kira says, “Finding solutions in these very complex cases often took up to two years.”

Current Stabilization Services Director Shannon Rae says, “Closing a program is never an easy decision, especially one that has had such a tremendous impact and has been such an integral part of Solid Ground. Working closely with the Mortgage Services team, we realized together that the current funding model would not support the program as it needed to, and that it was not sustainable for staff to continue to operate at the level of funding that was available.”

From her perspective at All Home, which works throughout King County to make homelessness “rare, brief and one time,” Kira comments, “We have to make such difficult decisions. We continue to have such huge, endless need. Solid Ground is such a strong multi-service organization that addresses homelessness prevention from many different angles. While there will always be a need for mortgage and foreclosure counseling, there are many partners in our region who will carry on the work.”

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Featured image at top: Former Housing Counselor Bess Ervin meets with a program participant.