Gladys has a good job at the post office.  Her husband was working, too, and their daughter was attending technical school, getting ready to launch her own career.  They had accumulated some debt - household expenses, school loans, credit cards - but refinanced their mortgage to consolidate debt.  The terms were tough, a loan of 8.9% with payments of $1,553 a month which did not include escrow for insurance and taxes.  Tough but manageable. Then her husband lost his job. 

They stayed current with the mortgage, but started to fall behind with the taxes.  When they could not delay a tax payment any longer, they made the tax payment, but did not pay the mortgage.  It took months to recover from the tax payment, and Gladys was making partial mortgage payments.  Being proactive about her situation, she contacted the Connecticut Families program and others to see if she had options available to her, but her debt ratio was too high, and she didn't qualify for the programs.  So she came to the Greater New Haven Community Loan Fund.

Our Foreclosure Counselor Terry spoke with Gladys' lender to work out a modification to her mortgage.  (Thanks to new federal legislation, lenders are more amenable to renegotiating terms when reasonable solutions are offered.)  They agreed to reset the mortgage to a 5.9% interest rate for three years, and to add the delinquency to the end of the mortgage, extending its term.  Gladys' payments are now $1,467 a month, and include taxes and insurance.  

The terms of the modification included the first payment made within two weeks, and the next payment due six weeks later.  The next tax payment, coincidentally, was also due in six weeks.  Reasonable plan, but Gladys did not have the resources to make the extra mortgage payment, and the tax payment.

This where the Neighbor to Neighbor Lifeline rescue funds came in.  The funds were used to pay the mortgage company directly for one month, and to pay the city tax collector.   When the next mortgage payment comes due, Gladys will be back on track, and can make the payment on her own.  By the time the next tax payment is due, Gladys will have made six months of escrow payments, and she'll be ready to pay the taxes on her own.  Rescued indeed.