Together, we do the community justice.

Americorps helps homeowners avoid foreclosure

_{MAY 3, 2011}

Americorps helps homeowners avoid foreclosure

DAYTON — When Donnie Thomas faced his sixth foreclosure filed against him in nine years, he finally showed up with an attorney.

The difference was clear: He also finally got a true loan modification needed to save his home.

"We regularly see clients who have agreed to prior 'modifications' that were not in their best interest and cause them to re-default," said Lauren E. Dreshman, an attorney working with Advocates for Basic Legal Equality Inc., a nonprofit regional law firm.

Dreshman, 28, got Thomas' loan changed from an adjustable rate that, at the time, was at 14.25 percent, to a 5 percent fixed loan. She is one of 14 Equal Justice Works "fellows" in Ohio. Eight of those, including Dreshman are funded by AmeriCorps.

_{MAY 3, 2011}

Americorps helps homeowners avoid foreclosure

DAYTON — When Donnie Thomas faced his sixth foreclosure filed against him in nine years, he finally showed up with an attorney.

The difference was clear: He also finally got a true loan modification needed to save his home.

"We regularly see clients who have agreed to prior 'modifications' that were not in their best interest and cause them to re-default," said Lauren E. Dreshman, an attorney working with Advocates for Basic Legal Equality Inc., a nonprofit regional law firm.

Dreshman, 28, got Thomas' loan changed from an adjustable rate that, at the time, was at 14.25 percent, to a 5 percent fixed loan. She is one of 14 Equal Justice Works "fellows" in Ohio. Eight of those, including Dreshman are funded by AmeriCorps.

Equal Justice Works AmeriCorps estimates that those eight fellows saved 233 Ohio families from losing their homes during the 2009-2010 fiscal year.

"What we're doing is fundamental to the recovery," said Cole McMahon, Equal Justice Works senior program manager for AmeriCorps. "You can't put a dollar figure on that."

Now in its 25 year, Equal Justice Works is one of many groups that AmeriCorps funds, like Habitat for Humanity. But with budget tightening, AmeriCorps is expected to see a 6 to 7 percent cut this year, and possibly more next year, McMahon said.

"We have lawyers who want to serve their country and are willing to do it for AmeriCorps pay," McMahon said. "That shouldn't be a political football. It should be who we are."

One homeowner's plight

Donnie Thomas, 40, bought his Stewart Street home, just west of the bridge, in 1995. One of his great aunts died, leaving it in control of other relatives, before he purchased it.

The original loan was for $29,900, Dreshman said.

Thomas, who worked as a telemarketer, had trouble making his payments. His first foreclosure was filed in 1999. But each time, the lenders declined to take his home from him.

The reason, Dreshman said after a review of those records, was that Thomas, unrepresented by an attorney, would agree to loan modifications that merely capitalized the arrearage and fees. This would make his payments go up, not down, she said.

"Homeowners who do not have an attorney frequently agree to this type of arrangement because they believe it is the only option to save their home," Dreshman said. "Loan modifications are only effective if they reduce the payments to an affordable monthly payment."

In 2006, his modification raised his principal to more than $37,000, Dreshman said.

At the same time, Thomas was going through a series of setbacks. His mother died in 2008, and he took his sister, a minor, in. In September 2009, he suffered a heart attack, which left him permanently disabled with congestive heart failure.

"I was a full-time employee," Thomas said. "My doctor told me I couldn't work anymore."

The latest foreclosure was filed in 2008, but Dreshman didn't get the case until last fall. The first time she talked with him, he was back in a hospital bed.

Dreshman negotiated a loan modification that lowered his monthly payments from $647 to $417, Thomas said.

"That's a substantial amount, considering I'm on a fixed income," Thomas said.

Thomas said he could never afford an attorney on his own.

He described Dreshman as "sincere" and said she would call him to see how he was doing, to make sure he was healthy enough to make his appointments.

"I guess that's above and beyond duty," Thomas said.

Dedicated attorney

Dreshman, who has a bachelor's degree from Ohio University and a graduated in 2009 from the Creighton University School of Law in Nebraska, is the first member of her family to graduate and receive a bachelor's degree. Her grandparents didn't even go to high school.

Her family is working class. Her grandfather retired from the General Motors plant in Moraine. Her mother is a secretary. Her father is a former business executive downsized several times. He now holds "several" jobs, including school bus driver, Dreshman said.

"I have had plenty and I have lived paycheck to paycheck," she said. "I really empathize with the clients. I understand those struggles."

She could be making twice as much at a high-profile law firm, but said she wouldn't get the same feeling of satisfaction from helping people.

She has handled about 40 cases since she started the 12-month fellowship in October and hasn't lost a house yet, she said.

The Joint Economic Committee of Congress estimates the cost of a foreclosure to the taxpayer and community to be $77,935.

"Our work keeps your property values up," Dreshman said. "And these foreclosures are destroying our neighborhoods."

She said longtime unemployment is the No. 1 factor in the cases she sees. Some homeowners had loans they could never
afford. Others had dramatic changes to their lives, through medical emergencies or job loss.

"It's not because they've mismanaged their money," she said. "They have spent all of their life savings, their retirement money."

Some are poor, others middle class. Some are blue collar, but others are college educated. But Dreshman said all of her clients have one thing in common: They never thought they'd be sitting in the chair across from her.

"People do everything they can to save their homes," she said. "By the time they're in front of me, I'm their last resort."

Thomas, who said Dreshman 
brought him peace of mind, agreed.

"You never know what street you'll end up going down in life," Thomas said. "I know there's a lot of people just like me."