Family without a safety net Foreclosure: There used to be a federal program to help Walter Wyatt's family keep their home after an injury left him unable to work. In the name of efficiency, Congress killed it.

September 22, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

When her anger threatens to boil over, Mary Wyatt's eyes well up and her North Carolina drawl thickens. The bank is taking back the house, but the mother of three can't bring herself to pack up the clothes heaped on the children's beds.

"Here's the American dream flushed down the toilet," said Mrs. Wyatt, who left a cashier's job five years ago to follow her husband back to his native Baltimore.

At her side, in a living room furnished with the neighbors' discarded rug and sofas, Walter Wyatt sighed heavily, the provider who can't fix things this time.

"I'm used to pulling rabbits out of hats," said Mr. Wyatt, 32, soft-spoken and baby-faced.

"There's always been some way of getting by, but I can't see anything I can do anymore. I have no idea where I'm going to move to and three kids to worry about."

Just five months ago, the Federal Housing Administration would have taken over his FHA-insured loan from his bank and reduced or postponed his mortgage payments for up to three years because serious back injuries left him unable to work.

But the safety net meant to keep victims of sudden illness or job loss from losing their homes no longer exists: Congress killed it in April.

Now, housing experts warn that hundreds of families in the city -- where FHA insures one in three home loans -- and untold thousands more nationwide risk losing their homes through foreclosure.

"It's a desperate situation," said Leon Creamer, director of consumer services and housing for the Baltimore Urban League.

"Borrowers are really left at their own ends. We don't have anything to lean on."

In eliminating the program, the government said commercial lenders could work with families more effectively than the FHA to prevent foreclosures, allowing more people to keep their homes in the long run.

But countless homeowners have lost that chance, and officials of the Department of Housing and Urban Development, which oversees the FHA, acknowledge it could be a year before they know how new efforts have worked.

No one disputes the growing need for help among families facing circumstances beyond their control.

In just six years, the number of people using HUD's safety net, known as the Assignment Program, tripled to 71,500, including 800 to 1,000 a year in Maryland.

And since April in the city, housing counselors have seen an alarming increase in homeowners seeking help.

At St. Ambrose Housing Aid Center, where about 300 people apply for the program each year, the number of calls from borrowers facing possible foreclosure has skyrocketed to 20 a day.

One of those calls came from the Wyatts, soon after a July 24 letter from NationsBank said the lender would repossess their house.

Walter Wyatt never thought it would come to this. He'd never before needed welfare.

And he certainly never thought the family would lose its $60,000 tan rowhouse in Northeast Baltimore.

Little more than a year ago, the Wyatts put all their savings into the home, with its stone porch, small back yard and rooms filled with furnishings they built themselves or found in alleys.

"I had kids and I had to supply a roof for them," Mr. Wyatt said. "When I found it was possible for me to get into this house, I did. I figured we were settled and would grow as a family, that this would be our last place to move."

In June 1995, the Wyatts moved in with two children, John, now 4, and Jennifer, now 3. Six months ago their youngest daughter, Jaqi, was born.

But their lives changed irrevocably last summer with one swing of a sledgehammer at Victory Racing Plate Co., the Rosedale horseshoe plant where Mr. Wyatt had worked for more than a year, earning $307 a week.

While repairing equipment, he missed his mark, lost his balance and severely twisted his back.

The injuries sidelined him temporarily, first for 2 1/2 months last year, then since May 12, after doctors discovered ruptured discs and nerve damage that only surgery could fix.

They first had tried drugs, physical therapy and traction, then put Mr. Wyatt into a body brace in July.

Last week at Sinai Hospital, neurosurgeons removed and fused discs, a procedure that will require months of recovery before he can work again.

From the beginning, his company and its insurer, Hartford Casualty Insurance Co., have challenged his worker's compensation claim, contending his injuries didn't stem from the accident.

In a Feb. 12 ruling, the Workers' Compensation Commission in Baltimore found Mr. Wyatt had been injured on the job and ordered his employer and insurer to pay 2 1/2 months of medical expenses and disability.

Mr. Wyatt used the $278 a week to keep paying his mortgage.

Because of the appeals, the commission has rescinded disability pay it had initially awarded for the period since May.

Neither company officials nor a Hartford attorney would comment on the case, which is scheduled for trial in Baltimore County Circuit Court in March.

Left with no other means, the Wyatts have been forced onto food stamps and Aid to Families with Dependent Children.

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