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HOPE Alliance Beefs Up Foreclosure Prevention Efforts

Federal and private entities alike are intensifying their preventive efforts in helping homeowners across the country avoid foreclosure.

The House Financial Services Committee recently examined "progress in the coordinated efforts of Hope Now, an alliance between counselors, mortgage market participants, mortgage servicers and investors to build on existing efforts by creating a unified, coordinated plan to reach and help as many at-risk homeowners as possible." (See related story, page 23).

Beginning Nov. 19, over 200,000 letters were sent to the most troubled borrowers that need help right away. Outreach will continue in the coming months through letters and other efforts to contact homeowners.

"These letters comprise the first deliverable of the Hope Now alliance, to reach out to at-risk homeowners to get them the help they need," said Bill Longbrake, senior policy advisor on the Financial Services Roundtable's Housing Policy Council. "While individual loan servicers continue outreach efforts on their own, this is the first step coordinated under the Hope Now alliance and this is a top priority for all those involved."

Members of the alliance hope that cooperation "will be more effective than by working independently." Prompted by HUD and the Treasury Department, so far the alliance includes some of the country's largest financial organizations, such as the American Bankers Association, American Financial Services Association, American Securitization Forum, America's Community Bankers and Homeownership Preservation Foundation, as well as some of the largest banks like Bank of America, Citigroup Inc., HSBC Finance, JPMorgan Chase, Countrywide Financial Corp., Washington Mutual and Wells Fargo, and also Fannie Mae, Freddie Mac, and insurers such as PMI Mortgage Insurance Co., with more companies and organizations expected to join.

In October, the Mortgage Bankers Association added to its HomeLoanLearningCenter.com consumer education site a bilingual foreclosure prevention resource center. It is part of MBA's outreach effort "to advise those who may face trouble making their loan payments to contact their loan servicer" as soon as they can so they can determine whether there is a way-out alternative. The site includes a listing of major servicers, contact information and a guide on "things to know" when contacting a lender.

"The sooner the borrower who is having trouble contacts his or her servicer, the more options they may have to make alternate arrangements," said MBA president and CEO Jonathan L. Kempner in a company release. "We concur with Treasury Secretary Paulson's recent testimony about the important need for homeowners to be proactive in seeking mortgage counseling."

The National Foundation for Credit Counseling, Silver Spring, Md. -- a network of nonprofit, community-based agencies through over 1,200 certified housing counselors -- recently launched the Mortgage Reality Check "to assist homeowners in determining whether they may be at risk of losing their homes," the company said, given that the current homeownership crisis is affecting more and more consumers.

Homeowners concerned about their ability to pay their adjustable-rate mortgage payments now or in the near future, or who feel pressure from their mortgage companies and creditors, may be at risk of foreclosing. The new product was designed to help their financial well being through an easy quiz that identifies problems and provides guidance. Recognizing the warning signs and taking action "even if foreclosure seems inevitable," NFCC said, can help get ahead of potential problems sooner and better.

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