For Immediate Release
April 10, 2006
Contact: Becky Fleischauer, 202-220-2360; bfleischauer@nw.org
National Mortgage Lenders and NeighborWorks Partner to Avert Foreclosures
Improving research, counseling and local partnerships viewed as key solutions
(Washington, D.C.) – Twelve major mortgage lending institutions are joining forces with the NeighborWorks Center for Foreclosure Solutions to launch a national partnership to avert foreclosures in demographic and geographic foreclosure hotspots, where decades of gains in minority homeownership and neighborhood revitalization are being threatened.
The lending institutions, listed below, are providing more than $1 million to the NeighborWorks Center for Foreclosure Solutions, and are contributing equally valuable trade insights and information that will be used to educate a force of counselors equipped to navigate the very complex loan servicing process.
“This show of support from the lending community demonstrates the enormous stake we share with lenders in the effort to stop foreclosures,” said NeighborWorks America CEO Ken Wade. “Contrary to some stereotypes, banks stand to lose in foreclosures as well. It is much less expensive for lenders, cities and families to counsel and restructure loans than it is to foreclose on a home.”
The national partnership will provide three solutions to avert foreclosures:
1. Better research and early alert systems. Targeted research will identify various factors contributing to increased home loss in specific markets, which in turn will assist in developing and implementing specific strategies.
2. Improved counseling capacity to cover a range of triage needs for those on the brink of foreclosure, particularly the ability to more effectively negotiate with lenders and servicers. Lender-offered repayment plans have reduced the home loss of low-and moderate-income borrowers by 68 percent. (Cutts and Green, 2004)
3. Increased public and private partnerships among cities, lenders and servicers aimed at averting foreclosures. For example, an innovative campaign spearheaded by the city of Chicago, the Homeownership Preservation Foundation and NeighborWorks organization NHS of Chicago prevented more than 700 foreclosures in the past 18 months.
The national partnership will begin its work this month in Ohio where foreclosures have more than doubled in the last five years. In addition to Ohio, NeighborWorks will target 8 to 10 communities hit hardest by foreclosure. The effort will link Ohio callers using the Homeownership Preservation Foundation hotline (1-888-995-HOPE) to triage strategies that help homeowners on the brink of losing their homes avert foreclosure.
Within the last five years, nearly three-million households in the U.S. have entered foreclosure—the majority in geographic “hotspots” that are disproportionately low-income and minority. The foreclosure rate on total mortgage loans in the U.S. has increased by more than 50 percent since 2000.
Participating lending institution include:
• Bank of America
• Citigroup
• Countrywide Home Loans
• HSBC– North America
• Chase
• National City Mortgage Co.
• New Century Financial Corporation
• Ocwen Loan Servicing, LLC
• Option One Mortgage
• Residential Capital Corporation
• Washington Mutual
• Wells Fargo
*Many lending institutions on this list are members of the Housing Policy Council of the Financial Services Roundtable
About NeighborWorks America
The NeighborWorks Center for Foreclosure Solutions is an initiative of NeighborWorks America, a nonprofit organization providing financial support, technical assistance and training for communities across the nation, including the NeighborWorks network—a nationwide network of more than 245 community development organizations working in more than 4,400 urban, suburban and rural communities across America. These organizations engage in revitalization strategies that strengthen communities and transform lives. In the last five years alone, NeighborWorks organizations have generated more than $10 billion in reinvestment and helped more than 780,000 families of modest means purchase or improve their homes or secure safe, decent rental or mutual housing.
