On the House: Those on bubble now getting help

George Hammond has been out of work for more than 17 months, is having trouble finding another job, and has no idea how long he will collect $2,200 a month in unemployment benefits from the state.

That prospect puts the 51-year-old Bridgeport, Montgomery County, man between a rock and a hard place when it comes to continuing to make payments on the house he bought for $127,000 in 2007.

"I've been paying my mortgage and keeping up with my bills," said Hammond, who lost his job in Internet technology security at Wyeth Pharmaceuticals after 24 years when the company decided to outsource it.

Finding a new job is tough. In this economy, he said, "the pharmaceutical companies are not only not hiring, but have cut back 50 percent of their employees."

Still, Hammond looks for work, not only because he wants to be employed again, but also because he must offer to the state proof that he's doing so, in order to retain his jobless benefits.

Hammond acknowledges that he is better off than most. He received a severance package from Wyeth. He still has money in his 401(k), even after the ravages of last fall's Wall Street meltdown, and realizes that he could liquidate it and pay off the mortgage's $98,000 balance.

He has looked on Zillow.com and other real estate search engines, which tell him that his house, "which I bought without overextending myself," is worth more than what he paid and certainly more than his loan balance.

"I don't want to sell my house, nor do I want to raid my retirement fund," he said. He does want to be prepared for what the future brings.

Hammond's situation is becoming the rule rather than the exception as the economy has sunk deeper into recession and unemployment has spread.

John Dodds of the Philadelphia Unemployment Project warns that growing joblessness is thwarting government and private efforts to rein in the nation's record foreclosure rate.

In normal times, joblessness, illness, and divorce are the top three causes of delinquency and foreclosure.

Hammond is nowhere near foreclosure and still far from being unable to make his mortgage payments. That has worked against him: Until recently, his mortgage servicer, PHH Corp., would not even talk with him because he was not behind.

But the situation is changing with the government's Making Homes Affordable initiative, designed to prevent foreclosures by modifying or refinancing up to 9 million loans to lower, more manageable rates.

PHH is now willing to talk, Hammond said. In addition, he is contacting a nonprofit, government-authorized counseling service, Consumer Credit Counseling Service of the Delaware Valley, to discuss solutions.

If your loan servicer is one of the 16 that have signed on so far, it will be amenable to helping you, thanks to government incentives. To find an authorized counseling agency, go to www.makinghomeaffordable.gov. Counseling is free. If someone asks you to pay, run.

Inquirer real estate writer Alan J. Heavens is the author of "Remodeling on the Money" (Kaplan Publishing). His home-improvement columns appear Fridays in Home & Design.

"On the House" appears Sundays in The Inquirer. Contact Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com.