For Immediate Release
June 25, 2007
Doug Robinson 202-220-2360
Beth Costiglio 212- 984-1923
Homeownership Preservation Foundation
Tracy Morgan 952-857-6822
NeighborWorks America and The Ad Council Launch National Foreclosure Prevention Awareness Campaign — Research Shows that High Concentrations of Foreclosure can Depress Values of Nearby Homes
WASHINGTON — NeighborWorks® America, one of the nation’s largest housing and community development organizations, announced a new public awareness campaign today with the Ad Council aimed at preventing home foreclosure that urges homeowners in financial trouble to call 888-995-HOPE. The Homeowner’s HOPE hotline, provided by the Homeownership Preservation Foundation, is the
cornerstone of a foreclosure prevention effort involving many of the country’s largest mortgage market companies. The public awareness campaign strives to reduce the number of homes entering the foreclosure process, which is expected to exceed one million households in 2007.
Given that each foreclosure costs $30,000 or more, the total cost to the housing finance system of one million foreclosures could approach $30 billion.
Some of the partners of the NeighborWorks Center for Foreclosure
Solutions were onhand for the launch event.
The Neighborhood Impact from Foreclosure
Importantly, research highlighted today by NeighborWorks America shows that homes that are not directly foreclosed upon can also be affected by foreclosure. Research showed that homes that are close to those that were foreclosed upon lose nearly one percent of their value for each foreclosed property within an eighth of a mile. For hard-hit neighborhoods around the country where dozens of homes within blocks of each other have been foreclosed upon, neighboring homeowners can expect their home values to drop by 10 percent or more.
The public awareness campaign by NeighborWorks America and the Ad Council is aimed at preventing this devastating outcome.
“The campaign that we launch today with the Ad Council is vitally important to maintaining the gains that have been achieved in homeownership,” said NeighborWorks America CEO Ken Wade. “Earlier this month, the Mortgage Bankers Association, a campaign supporter, released new residential mortgage foreclosure statistics that show the problem of foreclosure is increasing. Families are under stress from a variety of complicated sources — high mortgage costs from adjustable rate and subprime mortgages, weak local economies, personal factors such as illness, or divorce and more — but the action every homeowner at risk of foreclosure needs to take is simple: Call the Homeowner’s HOPE hotline and begin the conversation to work out the problem and avoid foreclosure.”
“We are thrilled to partner with NeighborWorks America on this critical issue of home foreclosures because we recognize the devastating effect foreclosure can have on a family,” said Peggy Conlon, president and CEO of the Ad Council. “We are confident that these new PSAs will resonate with homeowners struggling with their mortgages and encourage them to contact the hotline to learn what they can do.”
“We're currently hearing from more than 500 callers each day,” said the Homeownership Preservation Foundation President and Executive Director Colleen Hernandez. “Homeowners are facing foreclosure at record rates. This issue reaches into every social and economic demographic out there and homeowners facing delinquency need to remember that they're not alone. Even if you're currently not having problems paying your mortgage, chances are you know a friend, family member, co-worker or acquaintance that may be. We want to get the message out there — call 888-995-HOPE for help.”
“We know from research conducted by Freddie Mac, one of the early supporters of our effort, that half of families who enter into foreclosure never call their lender for help,” said Wade. “That’s the wrong thing to do. When a home is foreclosed, everyone loses — the family, the community, and the lender.”
The television and radio public service announcements shown at the campaign launch today are expected to begin airing in early July. Print and Internet-targeted spots will follow. The public service announcements, and more information about the campaign, are available on the campaign’s web site, www.ForeclosureHelpandHope.org.
NeighborWorks Foreclosure Prevention Efforts to Date
A key element of the NeighborWorks America fight against foreclosure is its signature program, the NeighborWorks Center for Foreclosure Solutions (CFS), created to preserve homeownership in the face of rising foreclosure rates. In conjunction with national nonprofit, mortgage and insurance partners, the CFS builds capacity among foreclosure counselors around the nation, conducts public outreach campaigns to reach financially distressed homeowners, and researches local and national trends to develop strategic solutions. In cities and states with high rates of foreclosure, the CFS works with local leaders to create sustainable foreclosure intervention programs.
CFS already has launched statewide foreclosure prevention initiatives in Ohio, Georgia and Delaware and local initiatives in Baltimore and St. Louis. The CFS plans to start dozens more local and state initiatives and to leverage the influence of the Ad Council campaign to encourage more families to call their lender or local NeighborWorks organization for help avoiding foreclosure. The current campaigns have helped increase the number of callers to the 888-995-HOPE hotline from approximately 700 per month in July 2006 to nearly 15,000 per month in June 2007.
Over 190 local nonprofits and municipalities have joined the national ad campaign to promote foreclosure counseling in their communities.
About NeighborWorks America
NeighborWorks America creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. To date, we have assisted nearly 850,000 low- to moderate-income families with their housing needs. Much of our success is achieved through our support of the NeighborWorks network ― more than 235 community development organizations working in 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. In the last five years, NeighborWorks® organizations have generated more than $12.4 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals. www.nw.org.
The Advertising Council
The Ad Council is a private, non-profit organization with a rich history of marshalling volunteer talent from the advertising and media industries to deliver critical messages to the American public. Having produced literally thousands of PSA campaigns addressing the most pressing social issues of the day, the Ad Council has effected, and continues to effect, tremendous positive change by raising awareness, inspiring action, and saving lives. To learn more about the Ad Council and its campaigns, visit www.adcouncil.org.
About the Homeownership Preservation Foundation
Founded in 2004, The Homeownership Preservation Foundation is a Minneapolis-based 501(c)(3) nonprofit dedicated to reducing foreclosures and preserving homeownership for American homeowners. The Foundation partners with city, county and state governments; federal government agencies; community-based non-profit organizations; and mortgage companies to offer creative solutions to preserve homeownership. HPF’s cornerstone service is the Homeowner’s HOPE Hotline, a foreclosure prevention counseling service available free to American homeowners by calling 888-995-HOPE. For more information about the Homeownership Preservation Foundation or the Homeowner’s HOPE Hotline, please visit www.995hope.org.
Partners of the NeighborWorks Center for Foreclosure Solutions
American Financial Services
“I applaud NeighborWorks America and the Ad Council for bringing this important message to the American public. Everybody loses in a foreclosure,” said Rick Geissinger, chairman and CEO of American General Financial Services. “By taking action early and establishing a dialogue, homeowners and lenders can partner in most cases to develop a workable solution to keep the family in their home.”
Bank of America
“Bank of America, the bank of opportunity, believes home ownership is an important part of the American dream and encourages homeowners to reach out to their mortgage servicer or NeighborWorks should they need assistance with their mortgage payments,” said Bob Caruso, Bank of America National Servicing executive. “The sooner a borrower establishes contact, the more options are available that can help resolve the issue. We want our customers to stay in their homes, and getting an early start is the best way to make that happen.”
Barrett Burke Wilson Castle Daffin & Frappier, LLP
“Education is a fundamental factor in reducing the troubling rise of foreclosures in our nation, and we are pleased to join with this coalition in providing the resources and personalized support that will help homeowners in working with their servicers to retain their homes,” says Robert Frappier, a partner in the law firm of Barrett Burke Wilson Castle Daffin & Frappier, LLP.
“This awareness campaign reaches out to consumers before their problems become harder to solve. Like our partners NeighborWorks and the Homeownership Preservation Foundation, Chase works hard to help our customers succeed as homeowners,” Donna Sheline, director, Homeownership Preservation Office. “We encourage them to alert their lenders if they are having trouble making payments and we let them know about help that may be available. Often, a nonprofit counseling agency can reach customers who haven't responded to us, and can provide the information and guidance borrowers needed.”
“As part of Citi's overarching commitment to make communities better because we are there, we enthusiastically embrace this most recent effort to offer borrowers in distress yet another means of reaching out for qualified and expedient assistance. The roll out of the Ad Council of America Public Service Announcements is something Citi has supported from the inception of the NeighborWorks-Homeownership Preservation Foundation partnership to help prevent foreclosures nationwide. It is clearly integral to our strategy in helping borrowers understand the need to reach out for help and then providing an easy tool to accomplish this should help lenders and servicers help many more families and individuals stay in their homes,” said Heidi Coppola, director, Mortgage Finance, Citi Markets and Banking.
Countrywide Home Loans
“Mortgage lenders, consumer groups and secondary market investors are working together in an unprecedented effort to reach out to borrowers facing financial challenges,” said Jerry Durham, vice president of Home Preservation for Countrywide Home Loans. “This is a prime example of the cooperation between these groups.”
EMC Mortgage Corporation
“EMC Mortgage is committed to helping homeowners overcome their fear of talking to their servicer,” said John Vella, president and chief executive officer of EMC Mortgage Corporation. “Our goal is to reach out to our customers in trouble and let them know that many times we can help them avoid foreclosure. We are proud to partner with NeighborWorks America and the Ad Council in a powerful and important public awareness campaign encouraging homeowners in financial distress to seek assistance.”
“A key to foreclosure prevention is to provide vulnerable homeowners with information and options before they get into trouble,” said Stacey D. Stewart, head of Fannie Mae's Office of Community and Charitable Giving. “We're pleased to support NeighborWorks and the Homeownership Preservation Foundation in their multi-faceted efforts to proactively reach borrowers and provide the counseling they need before payment shock hits.”
Said Ingrid Beckles, vice president of servicing and asset management: “Everyone who cares about homeownership should applaud NeighborWorks America and our fellow co-sponsors for coming together to make this groundbreaking campaign possible. It is a milestone effort by the non-profit community and the mortgage industry to jointly help delinquent borrowers discover and pursue responsible options for avoiding foreclosure.”
“GMAC ResCap has been at the forefront of developing innovative solutions to prevent foreclosures,” said Tony Renzi, chief operating officer of GMAC ResCap's Residential Finance Group and head of the company's servicing operations. “This ad campaign complements our face-to-face foreclosure prevention efforts as well as our sponsorship of the Homeownership Preservation Foundation, which our company provided seed funding. We believe all of these efforts will further the industry's goal of helping homeowners understand they shouldn't wait a minute longer to contact their mortgage company or to call 888-995-HOPE to help them avoid foreclosure.”
Housing Policy Council
“Responsible lenders want borrowers to be successful. No responsible lender wants to foreclose,” said John Dalton, president of the Housing Policy Council. “The Housing Policy Council and our member companies are pleased to partner with NeighborWorks America and the Homeownership Preservation Foundation in this program that improves lives by counseling consumers on their financial situation and working with them to help them succeed as homeowners.”
HSBC North America
“HSBC applauds the tremendous efforts by partners such as NeighborWorks to raise awareness of the assistance and resources available for homeowners,” said Loretta Abrams, vice president of Consumer Affairs at HSBC North America. “We recognize that many homeowners are facing increased challenges in today’s economic environment and HSBC will continue to fund programs that provide counseling and other practical tools to help families manage through unforeseeable circumstances.
Mortgage Bankers Association
“MBA is committed to assuring that borrowers continue to have the financing they need to buy and draw needed equity from their homes, and most importantly, stay in their homes. In this regard financial literacy is a key factor, because it empowers borrowers while allowing the mortgage industry to continue to serve them,” said John M. Robbins, CMB, chairman of MBA. “This partnership with NeighborWorks America is part of that commitment.”
National City Mortgage
“The mortgage industry is making strides, evidenced by the fact that homeowners are more aware of the services and options available to help them,” said Deb Oakley, senior vice president of Homeownership Preservation at National City Mortgage. “However, this national campaign will provide a newfound level of visibility to these services. It is important that homeowners know that quality, accredited counseling is available, either over the phone or, if it is more comfortable, face-to-face through a local NeighborWorks agency.”
Ocwen Loan Servicing, LLC
“Ocwen is very pleased to be a charter participant in this important national foreclosure prevention program with NeighborWorks and our mortgage industry colleagues,” said Ronald M. Faris, president of Ocwen Loan Servicing, LLC. “As a mortgage loan servicer of subprime loans, our consumer customers benefit significantly from the awareness, education and counseling they receive from this program. Helping homeowners is what we do best, and our involvement in this program evidences our commitment to do everything possible to enable our customers who are facing financial difficulties to stay in their homes.”
Option One Mortgage Corporation
“As one of the original supporters of NeighborWorks Center for Foreclosure Solutions, we are committed to keeping borrowers in their homes. We encourage borrowers who may be experiencing financial challenges to get in touch to discuss alternatives to foreclosure,” said Faith Schwartz, senior vice president of enterprise risk management and public affairs for Option One Mortgage Corporation. “We have a highly experienced, dedicated team of home retention experts available to help and can also offer free credit counseling through our partnership with the Center for Foreclosure Solutions. The sooner we know of a problem, the more solutions we can provide.”
“SunTrust is proud to be a corporate sponsor of the NeighborWorks America Foreclosure Solution Program. With foreclosures on the rise, it’s important for lenders to explore creative solutions that can help families stay in their homes,” said Sterling Edmunds, president and CEO SunTrust Mortgage Inc.
“WaMu supports NeighborWorks America's Center for Foreclosure Solutions, the Homeownership Preservation Foundation and the National Ad Council on this important borrower education campaign,” said David Schneider, president of WaMu's Home Loans Group. “Early intervention can make a make a major difference in mitigating delinquency and foreclosure. Helping borrowers stay in their homes is the right answer for WaMu, our industry partners, our customers and the communities in which they live,” added Schneider.
“During National Homeownership Month and throughout the year, we must do all we can to ensure homeownership is not built on quick sand. The earlier financially distressed homeowners reach out for assistance, the more options they have to address their mortgage issues and potentially avoid foreclosure,” said Kenneth D. Wade, NeighborWorks America CEO.
Industry studies show the foreclosure rate on mortgage loans has increased by more than 50 percent since 2000. How did this happen? While property values steadily increased and interest rates held near historic lows the past few years, buyers rushed into homeownership, and many were tempted by inappropriate loan products that appeared to be low-cost. These loans actually had short-term benefits and while they initially got many buyers into their homes, their interest rates were variable; as they climbed, tens of thousands of homeowners have been shocked by monthly payment increases they now cannot afford. In addition to rising interest rates, many families face foreclosure as a result of certain trigger events, such as loss of a job, reduction in income, or a health emergency. While there is no one reason that can explain why homeowners are facing foreclosure at an increasing rate, the surest way out is to ask for help.
According to recent industry studies, more than half of homeowners facing foreclosure do not call for help when they begin to fall behind on their payments. The early stages of delinquency are the most crucial — studies show that homeowners who are one or two payments behind are more likely to keep their homes than those who have fallen further behind on their payment schedule.
Homeowners having trouble paying their mortgage are encouraged to call 1-888-995-HOPE to receive foreclosure prevention counseling from U.S. Department of Housing and Urban Development (HUD)-certified counseling agencies, which include members of the national NeighborWorks network.
Many borrowers may be hesitant to call their bank because of embarrassment, fear, or lack of trust. Working with a counselor may help alleviate this anxiety because a counselor has the ability to serve as mediator between the borrower and lender.
With the help of a counselor, a homeowner can work with his or her lender to develop a reasonable action plan that will offer relief to the borrower. Lenders are often willing to work with a borrower to develop a plan of action designed to put the family back on the financial road to recovery.
Local NeighborWorks organizations that provide homeownership education and counseling can deploy a range of services to help homeowners at risk in the communities they serve, including face-to-face counseling, bridge loans to help borrowers falling behind in payments catch up, counseling on refinance options, and rehab loans for repairs and maintenance.
For more information about avoiding foreclosure, contact your local NeighborWorks organization (www.nw.org), or call 888-995-HOPE.
About NeighborWorks America
NeighborWorks America provides financial support, technical assistance and training for communities across the nation through the NeighborWorks network of over 235 nonprofit organizations covering nearly 4,500 urban, suburban and rural communities. These organizations engage in revitalization strategies that strengthen communities and transform lives. In the last five years alone, NeighborWorks organizations have generated more than $12 billion in reinvestment and helped more than 845,000 families of modest means purchase or improve their homes, or secure safe, decent rental or mutual housing.
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