Higher Number of Homeowners Call to Avoid Foreclosure
Homeownership counseling agencies seeing a new trend of significant growth in borrower efforts to avoid foreclosure are driven by market conditions along with higher awareness about financial counseling assistance and default prevention tools available.
The Homeownership Preservation Foundation of Minneapolis is one such agency reporting it received over 14,000 calls during the first quarter of 2007, a 30% increase over the fourth quarter 2006. It shows "a significant jump in the number of homeowners calling for assistance on its 888-995-HOPE hotline," the company said.
"Currently, more than 300 homeowners call 888-995-HOPE daily," said Colleen Hernandez, HPF president and executive director. "There are thousands of homeowners who are at serious risk of losing their homes unless they take action now."
Demand for services however also indicates that nationwide marketing efforts to assist those in need of counseling are paying off. Those who call the 888-995-HOPE number can receive free advice and counseling from nonprofit, HUD-certified organizations 24 hours a day, seven days a week.
According to Ms. Hernandez, reasons behind the current increase in the number of calls are to a large extent a "direct result of the rising number of homeowners suddenly finding themselves in the position of potentially losing their homes, combined with the growing awareness of the hotline as a result of a nationwide public service campaign."
In its efforts to reach out to a larger number of homeowners in need of assistance about their mortgage troubles, HPF said it has relied on partnerships with other entities. It has partnered with mortgage lenders, community-based nonprofit organizations and city, county and state government agencies, federal government agencies and is open to adding new partners.
Recently, HPF added Auriton Solutions, CCCS of Atlanta, Novadebt, and Springboard, which together represent the primary counseling center for the hotline, and CCCS of San Francisco, its fifth HUD-approved counseling agency.
CCCS has provided financial education and counseling nationwide since 1969, focusing on money management, credit, debt and housing issues through its housing education program.
HPF was established in 2004 aiming to reduce foreclosures based on a $20 million seed fund from GMAC ResCap, one of the nation's largest real estate finance companies.
Similarly, Wells Fargo & Co. reported in April that nonprime customers are increasingly aware of and interested in preventive financial education that will help them stay in their home.
Last month in Denver, over 300,000 nonprime Wells Fargo homeowners enrolled in first of its kind "Steps to Success" program designed to help customers better manage their credit and preserve homeownership in the long term.
"We did not design 'Steps to Success' specifically to address foreclosures," said Stephanie Christie, head of Wells Fargo Home Mortgage retail nonprime lending business. "However, once the loan is made, 'Steps to Success' offers the chance for customers to manage and improve their credit profiles and their financial solutions so that a delinquency or foreclosure is less likely."
Wells Fargo said its "Steps to Success" is a free, bilingual customer financial education program for borrowers with less-than-perfect, not-well-established credit, or other reasons that leave them with no other option but to chose a nonprime loan. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com