The national mortgage foreclosure crisis hasn’t hit Bowling Green very hard – yet.

But local officials worry that it’s coming, and are preparing to help people at risk of losing their homes. That help will only be effective, however, if people seek it early, according to Mayor Elaine Walker and Deborah Williams, executive director of nonprofit Housing Assistance and Development Services.

They just returned from a U.S. Conference of Mayors meeting in Detroit on the crisis and are planning a local summit of concerned agencies in late December, Walker said.

That will turn into a campaign to get homebuyers who can’t make mortgage payments to ask for help, and to get lenders to identify people whose mortgage deals may soon spell trouble, she said.

HANDS and the city are hoping to hook up with lenders, nonprofits and many other organizations, Williams said.

“I’m talking about anyone involved who could be impacted by the crisis that we’re probably going to see,” she said.

A report issued Nov. 26 by the U.S. Conference of Mayors and Council for the New American City says the developing nationwide crisis started in 2006 in Ohio, Michigan and Indiana, and is spreading to other states.

“The difficulty is that a lot of people are in loans that they really shouldn’t have qualified for,” Walker said.

HANDS is already seeing a dramatic increase in the number of people seeking credit counseling and mortgage help, Williams said. But if those people seek help early – when they’re about to fall one payment behind, rather than three or four – counselors can step in and often work out a deal with mortgage companies, she said.

“Don’t wait until the foreclosure notice is brought to your door by the sheriff,” Williams said.

In a period of record low interest rates and steadily climbing house values, many people took easy credit offers, hoping good economic times would continue for decades. But they often got hooked by “teaser” mortgages that dramatically increased payments after a couple of years, the report says. Now that lenders are seeing a wave of failure to pay, credit for new loans is drying up too.

Nationwide, about 3 million mortgages are scheduled to “reset” at a higher rate in May, Williams said.

Locally, that could mean the loss of $62 million in economic growth in and around Bowling Green, a combination of falling property values, fewer jobs, and reduced family spending in reaction to financial crises, the report said.

That loss will hurt more than just those who lose their homes. It would mean a shrinking tax base, allowing for fewer government services; while abandoned houses can mean unsightly neighborhoods and falling property values for those nearby.

“This is like a snowball going down a hill, and you’re gathering dirt and rock and everything as you go,” Williams said.

Not all of the costs are financial. Failure to make mortgage payments can strain family relationships, too, she said.

“You’re talking about children that are having to leave their homes,” Williams said.

To make matters worse, Williams said, desperate people facing foreclosure are often easy prey for predatory lenders who offer a short-term bailout for inflated payments later on, or scammers who offer to intercede with lenders – for a fee.

“These things can be done for free,” she said. “That’s why we are HUD-certified to do this.”

“Right now we’re the only HUD-certified organization here to assist with foreclosure prevention and loss mitigation,” Williams said.

People really need to get out their mortgage documents and figure out their terms

“Very few people read them,” Williams said.

— For more information on mortgage assistance, call HANDS at 796-4176.