Avoiding foreclosure

Virginia Beach, VA - Virginia Beach homeowner Mary McClellan was shocked when she saw her home advertised for sale in the Saturday edition of a Hampton Roads newspaper.

"It's embarrassing to see your home and your name is in the paper because you can't pay your bills," said McClellan.

McClellan's mortgage company foreclosed on her Virginia Beach house in April and that was yet another stroke of bad luck.

After sixteen years as a legal administrator, McClellan lost her job in August and her sole source of income became unemployment.

McClellan's daughter, Beth Fuller and her three children live next door and Fuller says the thought of having her mom move away is not a pleasant one.

"How are you supposed to tell a 10-year-old and a 14-year-old, they're old enough to understand, that Grandma's not going to live here anymore," pleaded Fuller.

By the end of 2008, McClellan says cash reserves had run dry and she hit a brick wall with her mortgage company. She missed her first mortgage payment in December.

McClellan says not much happened after missing that payment, because the bank doesn't consider you high risk until ninety days have passed.

Then after that ninety day period, trouble finally arrived. A document came in the mail to notify McClellan the bank had taken control of her home and it would be sold May 6.

"I didn't know what I was going to do, I knew I needed help," said McClellan.

Then a major announcement from the federal government flooded the media and McClellan says she took notice.

The Obama Administration vaulted into action with the $75 billion "Making Home Affordable" plan. The plan is part of the much larger $700 billion economic bail-out plan, passed in late 2008.

"It sounded like something that could help me," said McClellan.

Family and friends commented that this could be McClellan's golden ticket.

A federal loan modification program designed to stop foreclosure in its tracks, by drastically reducing interest rates and in turn, monthly payments. McClellan says she wasted no time applying.

"I had to send them a budget, my income, my expenses .. all my financial information," McClellan told WAVY.com

There was only one problem and it could be a potential deal breaker, a  30 to 45 day processing period that left the clock to May 6 ticking.

McClellan met Certified Housing Counselor John Allen at a foreclosure prevention forum presented by the Office of Congressman Glenn Nye.

After Allen's team at the UP Center in Norfolk made a few phone calls, a chance of success appeared.

"They had actually screened her and delayed the foreclosure," said Allen.

But an official acceptance letter for the federal loan modification had still not arrived and the May 6 sale date crept ever closer.

"If I could be on the program and they sell my house, then it's too late to be on the program," McClellan exclaimed.

The next morning, on April 29, something happened that changed McClellan's life forever.

The golden ticket everyone had been talking about arrived by overnight mail and McClellan became among the first in the nation to qualify for the federal "Making Home Affordable" plan.

"The federal government is willing to bring her payments down to 38 percent of what her total gross income is," Allen told WAVY.com

The acceptance letter meant McClellan's would be cut in half and more importantly, she could keep her home.

"I can starting living again. This is my house, this is my home and I don't want to live anywhere else," McClellan said.