Local housing experts gird for 'tsunami' of foreclosures

With the coronavirus pandemic wreaking havoc on workers in the Berkshires, Brad Gordon, executive director of the Berkshire County Regional Housing Authority, fears a "tsunami" of foreclosures in a region that only recently cleared the last wave of them. That's in part because so many county residents live close to the bone.

PITTSFIELD — Job losses in the Berkshires = housing trouble ahead.

That's an equation Brad Gordon knows too well. In light of the coronavirus slump, he has been thinking about how the Great Recession hit tenants and mortgage holders a decade ago.

"We had a tidal wave of foreclosures in the county. Whole neighborhoods were devastated," said Gordon, executive director of the Berkshire County Regional Housing Authority. "It may be similar in some ways or more dramatic. The job numbers are chilling. That is going to directly impact the housing market."

He fears a "tsunami" of foreclosures in a region that only recently cleared the last wave of them. That's in part because so many county residents live close to the bone.

Half of all county households make do with 80 percent of a median annual income of $56,000, a standard definition of low income. That often includes households where people work at restaurants and hotels, an area devastated by current business closings.

It isn't only tenants, or borrowers, who face stress. Gordon said most landlords in the county have small property holdings and scant cash reserves to tap when rents are not paid.

Taking steps

As with the virus itself, precautions matter.

When it comes to preserving one's housing, borrowers and tenants unable to pay monthly bills need to resist the temptation to hole up, according to Gordon and his team at the authority.

Though now forced to work remotely, the authority's staff is gearing up to help Berkshire residents improve their chances of coming through hard times intact.

Unlike traditional housing authorities, the agency provides programs and services, not housing. In the previous fiscal year, it worked with 2,300 households in Berkshire towns.

In a conference call Friday with The Eagle, leaders of the agency's various programs urged tenants and homeowners in the Berkshires to stay in touch with people to whom they owe money.

As with the public health crisis itself, experts have a pointed message: While social distancing helps prevent transmission of the virus, staying away or aloof when it comes to one's financial affairs brings trouble.

Government action is providing temporary protection from eviction and utility shut-offs. But, bills not paid in April will eventually come due.

"They need to contact their lenders," said Jim Hamilton, who runs the agency's Foreclosure Prevention Program. "Call them on the phone. Talk to them."

People who are able to pay their bills don't get a pass on mortgage payments, he notes. "This is not a vacation. This is not an excuse not to pay your mortgage."

"Forbearance" on a loan, in other words, is not the same as forgiveness.

Like his colleagues, Hamilton is trying to get ahead of what's expected to be high demand for counseling. Last year, his foreclosure prevention program worked with 52 economically distressed homeowners.

Kristen L. Curtin, director of the agency's housing, legal and counseling services program, wants to hear from tenants and landlords. Last year, her program advised 507 tenant households and 54 landlords.

She said the volume of calls has dropped off a bit in the past few weeks, perhaps because people are paying more attention to their physical health and caring for family members rather than tending to their financial condition.

Important to reach out

For many, delays in obtaining jobless benefits leave that picture cloudy at best.

"It's important that folks reach out to us to get the latest information, because this is a dynamic situation," Curtin said.

Kayla Wendling's team gets into gear when push comes to shove. She directs the 1 Fenn St. agency's dispute resolution and mediation program, which, last year, worked with more than 800 clients. Fortunately, she is accustomed to resolving disputes over the phone.

Wendling expects an influx of cases out of the three district courts in Berkshire County that refer people to the agency. The disputes are often over money.

"Maybe they just need to figure out a payment plan in this uncertain time," she said of incoming clients.

The dispute resolution center says it managed to help parties reach agreement in 89 percent of the cases it handled last year — 376 of them in the courts and 72 involving community-based conflicts.

The agency also helps people resolve interpersonal conflicts, which Wendling thinks might intensify, depending on how long people must work from home.

For those helped by the authority's Tenancy Preservation Program, hard times with housing are a given. The program helps people secure, or save, housing. They include those deemed to be "housing ready" but who might have no history of renting, past evictions on their records or disabilities.

Kim Borden, the program's director, said she is thinking about tenants who live alone amid the pandemic and fear eviction. "And about their isolation and the feeling that there is no access to services."

In 2019, Borden's program served 203 households, in four out of five cases enabling people to remain in their homes. Others got help making a change to new housing.

To reduce the risk of eviction, once a moratorium is lifted, Borden says people should pay what they can toward their bills, even if it is far from the total.

"Try to pay something," she said.

The worst thing to do, she and her colleagues say, is to leave mail unopened and to go "ostrich," avoiding contact with landlords and lenders.

When tenants and borrowers work the problem with eyes open, they say, they stand a better chance of heading off trouble — just as public health officials struggle to do with the virus.

"The housing crisis curve may be flattened as well," Gordon said.

Larry Parnass can be reached at lparnass@berkshireeagle.com, at @larryparnass on Twitter and 413-588-8341.