Avoid Home Foreclosure

Mortgage Crisis Facts

The housing market crisis has been receiving media attention for sometime now. Individual borrowers and investors are feeling the crunch, and so are U.S. and international markets. The following facts offer insight into the breadth of the crisis:

  • Nearly 25% of all mortgage loans made in 2005 were interest-only.
  • From 2004 to 2006, more than 2,500 banks, thrifts, credit unions and mortgage companies made a combined $1.5 trillion in high-interest-rate loans.
  • In 2005, borrowers with FICO® scores above 620 got more than half – 55% – of all subprime mortgages.
  • Every three months, approximately 167,000 new families enter into foreclosure in the United States.
  • Roughly 50% of homeowners who enter into foreclosure never contact their lender, even though their lender is the party most able to help them stay in their homes.
  • In 2006, over 40,000 homeowners at risk called the (888-995-HOPE) hotline. Nearly half of them have avoided foreclosure.

Resources to Help Homeowners Avoid Foreclosure

Government and Nonprofit Resources: A number of federal and state agencies and nonprofit organizations offer free or low-cost foreclosure prevention programs to eligible homeowners:

U.S. Department of Housing and Urban Development (HUD)

HUD provides a variety of resources for homeowners at risk of foreclosure. The Department funds free housing counseling services throughout the country. HUD-approved counselors can help homeowners understand the law and their options, organize their finances, and represent borrowers in negotiations with their lenders if this assistance is needed.

Telephone: 1-800-569-4287

Find HUD-Approved Housing Counseling Agencies in your State: www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?weblistaction=summary

Additional HUD resources for avoiding foreclosure: www.hud.gov/foreclosure/index.cfm

State Attorneys General

Homeowners who suspect that they have been a victim of fraud, misleading information, or other deceptive practices, should contact their state Attorney General’s office. These offices investigate complaints and sue lenders and other mortgage originators for alleged illegal behavior. In addition, several state Attorneys General have been instrumental in setting up multi-agency foreclosure prevention task forces that provide financial resources and proactive intervention for homeowners facing or at risk of foreclosure.

Find your state Attorney General’s office: www.naag.org/attorneys_general.php

State Housing Finance Agencies

State Housing Finance Agencies administer a wide range of affordable housing and community development programs. A number of state HFAs have partnered with other entities (including nonprofit counseling agencies, local governments, state housing departments and lenders) to provide comprehensive foreclosure prevention and mitigation strategies.

California State Resources:
www.yourhome.ca.gov/

HopeNow
An alliance between counselors (HUD approved), servicers and investors that strives to keep homeowners in their homes by helping them renegotiate their loans.
www.hopenow.com

Homeownership Preservation Foundation
A nonprofit that creates partnerships with local governments, nonprofit organizations, borrowers and lenders to help families overcome obstacles that could result in the loss of their homes.
www.995hope.org

Counseling Agencies Approved by HUD Developments
The U.S. Department of Housing and Urban Development (HUD) sponsors housing counseling agencies throughout the country that can provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.
www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

NeighborWorks Center for Foreclosure Solutions
Works to preserve homeownership in the face of rising foreclosure rates. www.nw.org

FHASecure plan
A refinancing option that gives credit-worthy homeowners, who were making timely mortgage payments before their loans reset but are now in default, a second chance with a FHA insured loan product.
www.portal.hud.gov

Also, please view this Avoiding Foreclosure Tip Sheet!