News Release

February 18, 2009

Contact: Douglas Robinson, 202-220-2360, drobinson@nw.org

NeighborWorks America Applauds the Obama Administration’s
Efforts to Combat Foreclosure
Cites the Importance of Nonprofit Foreclosure Counseling
for Homeowners in Danger of Losing Their Homes

Washington, D.C. —NeighborWorks America applauds President Obama, the U.S. Department of Treasury, and the U.S. Department of Housing and Urban Development on the announcement of the Homeowner Affordability and Stability Plan. The plan is an important step that gets ahead of future foreclosures by creating a way for borrowers facing imminent financial stress to get help, as outlined by several efforts that will help between seven to nine million families around the country avoid foreclosure and sustain homeownership.

NeighborWorks America also applauds the Obama Administration for enabling an estimated four to five million homeowners suffering from declining home prices to reduce their monthly mortgage payments through low-cost refinancing into lower mortgage rates. In addition to helping current homeowners, lower mortgage rates will help get prospective homebuyers back into the housing market.

NeighborWorks America is also pleased that the Administration has recognized the important role of nonprofit counseling in the homeownership process. Nonprofit homeownership and foreclosure intervention counselors ensure homeowners and prospective homeowners understand their options and the steps they can take toward sustainable homeownership.

NeighborWorks America supports efforts to help homeowners stay in their homes and preserve our nation’s vibrant communities. We look forward to working with the Administration and Congress to bring our resources and programs to this initiative and to producing the greatest impact possible.

Long-Term Loan Modifications
In addition to low-cost refinancing and lower mortgage interest rates, the President's plan gets out in front of the foreclosure problem and creates a standard for loan modification. NeighborWorks America is pleased to see modifications completed under the Homeowner Affordability and Stability Plan must be in place for at least five years, and that under the plan, a homeowner’s mortgage debt-to-income ratio will be brought down to 31 percent. However, NeighborWorks maintains that in order achieve sustainable homeownership, loan modifications must be sustainable over the course of the loan.

The Importance of Nonprofit Foreclosure Intervention Counseling
Community-based foreclosure intervention counseling provided by nonprofit certified counselors is a critical part of the foreclosure prevention process. Nonprofit counselors help homeowners understand their options and the steps they can take to stay in their homes.

NeighborWorks urges homeowners who may be in danger of foreclosure to contact a local HUD-approved nonprofit NeighborWorks organization for assistance. To find a nonprofit NeighborWorks organization near you, visit nw.org/network/Utilities/NWOLookup.asp.

NeighborWorks urges homeowners who need help to be wary of foreclosure rescue scams. Beware of any ad, person, or company that claims to be able to help homeowners avoid foreclosure for a fee. Nonprofit foreclosure counselors will never charge homeowners for their services.

Community Stabilization
NeighborWorks America supports the $2 billion in CDBG funds made available by the recent legislation to communities in the hardest-hit areas so that homes may be purchased, rehabilitated, and either sold or rented to moderate-income individuals and families.

The influx of vacant properties presents a unique challenge for housing nonprofits. As an industry, we must find a way to make these communities affordable and livable again.

NeighborWorks America, along with its network of more than 230 local housing nonprofit organizations, is concerned about the thousands of homes that are being left vacant due to the ongoing foreclosure crisis, and is currently working on nonprofit solutions to stabilize neighborhoods affected by foreclosure.

NeighborWorks looks forward to helping the Homeowner Affordability and Stability Plan get traction as quickly as possible. We plan to expand the flexibility and eligibility of our programs in order to accommodate the objectives of this new initiative.

For more information about the Homeowner Affordability and Stability Plan, visit www.financialstability.gov.

NeighborWorks Center for Foreclosure Solutions announced today it has recently received a donation in the amount of $50,000 from Smith Barney. This contribution was awarded to help support foreclosure intervention and prevention strategies.

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. In the last five years, NeighborWorks organizations have generated more than $19.5 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.