OAKLAND, Calif -- Giselle Jiles could be the new face of foreclosure. The 52-year-old financial planner has owned her home in Oakland’s Laurel District for 12 years. She did not buy an expensive home that was beyond her means and she did not sign up for a predatory adjustable rate mortgage that was reset at an unsustainably expensive rate.
Jiles did not make any of the mistakes she sees in stories about distressed homeowners on the nightly news. Her economic stress comes from a more traditional source.
Jiles was laid off in March 2009. More than a year later, she’s exhausted her savings and dipped into her retirement. Now, she’s worried about losing her home.
“I worked for the company 20 years and 20 years ago I got a job, like that,” she says snapping her fingers. This time, despite sending out hundreds of resumes, Jiles says she’s only gotten “a few interviews, a few call backs, but the companies started saying, ‘We just don’t have the money to hire you.’”
Jiles believes it could be a long time before she finds a new job. She says many of her friends and family members have been unemployed even longer. Nationally, the Labor Department reports 6.5 million Americans have been unemployed for more than six months, the highest number since the government began keeping records in 1948.
Housing counselors say they’re increasingly seeing people like Giles, who are worried about losing their home because of persistent unemployment.
“It’s as common or more common” than resetting adjustable rate mortgages or “underwater” borrowers who owe more than their home is worth, said Josie Ramirez, homeownership program manager at the Mission Economic Development Association in San Francisco.
Until recently, federal anti-foreclosure efforts provided little help to unemployed workers, but on March 26, the Obama administration announced changes to its Making Home Affordable Program that would allow some unemployed borrowers to have their mortgage payments temporarily reduced for a minimum of three months, and up to six months for some borrowers while they look for a new job.
The cost of that forbearance will be shared between lenders and the taxpayers, with the government’s participation funded through a $50 billion allocation for housing programs under the Troubled Asset Relief Program, or TARP.
The problem, says Ramirez, is that there’s nothing in any of President Obama’s anti-foreclosure programs that forces banks to work with troubled borrowers to keep them in their homes.
“It’s all based on incentives,” Ramirez said, “and you can’t just incentivize.”
The Treasury Department estimates 6 million home loans nationally are at least 60 days delinquent on payments, but through the end of March, the government reported that only 230,801 Americans had modified their loans through the Making Home Affordable program.
“There’s a picture of chaos and unaccountability and people just getting shafted with no recourse,” added Ramirez. “There’s no way to appeal a bank’s decision.”
Giselle Jiles has been trying to renegotiate her loan since November, when - eight months after losing her job - she attended an all-day clinic organized by the city of Oakland designed to help people stay in their homes.
That day, Jiles said, she filled out all the paperwork that her lender, JP Morgan Chase, required. She’s called the bank’s toll free number every week since and faxed over required documents again and again.
Jiles still doesn’t have an answer.
“It’s just overwhelming,” she said. “I totally get it when I see people on TV crying, because I’m pretty close.”
Chase spokesperson Tom Kelly initially refused to go on the record to discuss Jiles’ case, but after repeated inquiries from New America Media, he agreed to take down Jiles’ full name, address, and loan number.
The next day, Kelly called back to say that Jiles had only sent in the necessary documents the day NAM started reporting her story. Jiles’ loan modification request would be decided “in a few weeks,” Kelly said.
The same day, Jiles was contacted by an underwriter, the first time a bank employee had been assigned to work with her.
“These institutions typically only work with people when you put pressure on them,” said Josie Ramirez of the Mission Economic Development Agency. Sometimes she complains to Fannie Mae or Freddie Mac, government-chartered corporations that hold loans serviced by banks like Chase, Wells Fargo, and Bank of America. Other times, she calls a politician. Other times, she goes to the media.
“The regulations are so weak even the Obama administration is simply trying to shame them,” Ramirez said. “Sometimes that works, sometimes it doesn’t.”
To date, JP Morgan Chase has been earmarked more than $4.9 billion in taxpayer money to subsidize mortgage modification for struggling homeowners. Earlier this month, the company reported profits of $3.3 billion for the first quarter of 2010.
Aaron Glantz is New America Media's stimulus editor. Reporting assistance from the investigative news non-profit ProPublica.