One of the states hit hardest by the housing crisis is taking added steps to help homeowners.
Consumers in Nevada who face foreclosure on their homes, who would like to modify terms of their mortgages or whose homes are underwater, now have a toll-free telephone number they can call to connect with a counselor who may be able to help, attorney general Catherine Cortez Masto announced.
The program, dubbed "Home Again—Nevada Homeowner Relief Program," can help Nevadans, including those saving to buy a home, figure out what kind of state or federal assistance may be available, according to the attorney general's office, which has teamed with the state's Financial Guidance Center, Nevada Legal Services and the Legal Aid Center of Southern Nevada on the program.
The legislature has allocated $11.7 million to cover the expense of the first year of the initiative, which the sponsors anticipate will run for three years and cost a total of $33.5 million. The program itself will be paid for from the Silver State's share of $25 billion national settlement between state attorneys general and the nation's five-largest mortgage servicers.
Jo Ann Gibbs, the state's chief deputy attorney general for consumer protection, says sponsors envision the program as a "one-stop shop" that will connect callers with counselors who have been approved by the Department of Housing and Urban Development. "This is designed to help [consumers] sit down with a real person and work through their issues toward a solution and to recognize what programs are legitimate," Gibbs told American Banker.
The Financial Guidance Center, a nonprofit agency that works to help consumers achieve economic security through financially responsible behavior, will administer the program. Organizations participating in the effort include the Women's Development Center, Housing for Nevada, Community Services of Nevada, Neighborhood Housing Services of Southern Nevada, Novadebt, Springboard and Chicanos Por La Causa.
As part of its preparation, the center has trained counselors to know the details of programs that consumers can turn to for assistance. "We can help them with foreclosures, or short sales, or to financially stabilize and work toward home ownership," said Michele Johnson, the center's chief executive. "If there is a situation we are unable to resolve we have access to legal services for that consumer…so we can serve any Nevadan in need of additional services that can't be provided by a housing counseling agency."
Johnson notes that consumers become eligible for a mortgage backed by the Federal Housing Administration three years following a foreclosure. "Nevada will still have housing stock, it will be extremely affordable, and we can help that consumer be educated, save for a downpayment and understand mortgage terms so we can help a homeowner become a knowledgeable and stable homeowner."
Nevada has some of the highest foreclosure rates in the nation. It was among the first five states to receive funds from the Treasury Department's "Hardest Hit Fund," which awarded the state roughly $150 million to aid homeowners who face a high risk of default or foreclosure. In addition to the national mortgage servicing settlement, the state also forged a side deal in February with Bank of America that allows the attorney general to sue the bank in state court to enforce servicing standards. Nevada also was the first state to file criminal charges over alleged robo-signing of affidavits.
The sponsors, who say they anticipate assisting 30,000 households during the program's first year, also will expect to work with lenders and anticipate being able to smooth interactions between borrowers and banks. Because the counselors work regularly with the big banks, "we have the ability to circumvent some of the normal channels that a consumer would have to go through," said Johnson, who adds that her organization is seeing "more accessibility, more flexibility" from lenders.
Nevadans will be able to connect with the campaign by calling 855-457-4638, which forms the mnemonic HLP4NEV. "Our goal is to let people know this is a free, acceptable, legitimate program sponsored by the attorney general," Gibbs said.