FORECLOSURE PREVENTION COUNSELING EFFORTS RECEIVE BOOST FROM
$180 MILLION APPROPRIATION
NeighborWorks® America Selected to Award Grants to Approved Intermediaries
WASHINGTON, D.C. – Today NeighborWorks America announced that it was named in the FY2008 Consolidated Appropriations Act to administer a $180 million national mortgage foreclosure mitigation counseling program.
Under the legislation, NeighborWorks America (formally the Neighborhood Reinvestment Corporation) will make grants to housing counseling intermediaries approved by the U.S. Department of Housing and Urban Development and to qualifying state housing finance agencies (HFAs) and will provide foreclosure counseling training courses.
The legislation requires that NeighborWorks America grant at least $167,800,000 to qualifying organizations that provide mortgage foreclosure mitigation assistance primarily in states and areas with high rates of defaults and foreclosures primarily in the subprime housing market. The goal is to help eliminate the default and foreclosure of mortgages of owner-occupied single-family homes that are at risk of foreclosure.
Other than areas with high rates of defaults and foreclosures, NeighborWorks America is also able to provide grants to eligible applicants based on a geographic analysis of the nation by NeighborWorks America, which determines where there is a prevalence of subprime mortgages that are risky and likely to fail, including any trends for mortgages that are likely to default and face foreclosure. NeighborWorks America is currently conducting the research necessary to identify these areas.
Action within 60 Days of Enactment
The legislation requires that NeighborWorks America award $50 million of the funds within 60 days of the legislation’s enactment in states and areas with the greatest need. Additional funds may be awarded to HUD-approved intermediaries and qualifying state HFAs that have the need for additional funds in states and areas with high rates of mortgage foreclosures, defaults or related activities and the expertise to use these funds effectively.
NeighborWorks Organizations
The legislation allows NeighborWorks America to grant no more than 15 percent of the total funds (up to $27 million) directly to NeighborWorks chartered members with expertise in foreclosure prevention counseling, subject to certification by NeighborWorks America that the procedures for selection do not consist of any procedures or activities that could be construed as unacceptable conflict of interest or have the appearance of impropriety. There are approximately 200 NeighborWorks organizations with expertise in foreclosure intervention counseling.
Building Foreclosure Counseling Capacity
Of the total amount made available under the legislation, up to $5 million may be used to build mortgage foreclosure and default mitigation counseling capacity of counseling intermediaries through NeighborWorks America training courses with HUD-approved counseling intermediaries and their partners. However, the legislation requires that private financial institutions that participate in NeighborWorks America training shall pay market rates for such training. More than 200 homeownership counselors participated in foreclosure intervention counseling training at a recent NeighborWorks® Training Institute in Portland, Oregon.
Information about NeighborWorks America training programs can be found by visiting www.nw.org/network/training/training.asp.
NeighborWorks America Administrative Expenses
The legislation provides that up to four percent of the total made available (no more than $7.2 million) may be used for administrative expenses for NeighborWorks America to carry-out activities defined under the legislation, including a study to identify successful strategies and methods for preserving homeownership and the long-term affordability of at-risk mortgages. This report shall include recommended efforts that will or likely can assist in the success of this program as well as an analysis of any policy and procedures that failed to result in successful mortgage foreclosure mitigation. The report shall include an analysis of the details and use of any post mitigation counseling of assisted borrowers designed to ensure the continued long-term affordability of the mortgages which were the subject of the mortgage foreclosure mitigation assistance.
Reporting to Congress
NeighborWorks America is required under the legislation to provide a bi-annual report to the House and Senate Committees on Appropriations as well as to the Senate Banking Committee and House Financial Services Committee on its efforts to mitigate mortgage default. The reports’ contents are required to identify successful strategies and methods for preserving homeownership and the long-term affordability of at-risk mortgages and shall include recommended efforts that will or likely can assist in the success of this program, as well as an analysis of any policy and procedures that failed to result in successful mortgage foreclosure mitigation.
For more information, read Frequently Asked Questions
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 230 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.
Contact: Douglas Robinson, 202-220-2360, drobinson@nw.org;
Erin Angell, 202-220-6317, eangell@nw.org
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The only thing LO\’e2\’80\’99s cared about was the large commission.
Wow DJ, Now multiply that by millions of loans and realtor sold homes and the bubble as we know it, inflated by commissions, beemers, gucci bags and sushi lunches.
Plus all the other normal foreclosure factors…………….
the rest of the story:
the lenders who offered these loans added fuel to the fire by emailing Loan officers a teaser product sheet: (ie) a loan product flyer.
the lender would tease the loan officers by stating at 2.25 margin you will receive 1pt rebate, this continued; as the margin went up so did the rebate all the way upto 4pts. (this situation was fueled from many levels; i believe that all pieces of the puzzle have to take some ownership in this nightmare. lenders, realtors, consumers, wall street and the gov’t.
this not just a mortgage broker creation, many of Realtor/lenders, bank loan officers, credit union loan officers and you name it. (if you had the authority to lend money you could either run with the pack or standup to the crowd like i have on many occassion to the Real Estate community and inform them of the nightmare they are creating. this was never received well, usually poo pooed. only today do people remember back and remember my words.. we need more people to stand up and fight for the consumer (ie Moe and Brian).
thanks for creating a great forum. i pray that many of consumers will be guided and directed out of this nightmare.
i also, pray that the federal gov’t will force all loan officers to become licensed and regulated;unlike it is today in California and many other states. (the banks and some brokerages are not licensed – the dept of corp regulates them, along with all the corportions )
example: if you were a loan officer with Ameriquest (we all know aout them) and after they shut down the retail division for the numerious lending issues you could leave one day and tomorrow open up your own mortgage brokerage without licensed loan officers, then you could contact Argent wholesale (Ameriquest wholesale division) and request a line of credit for your company.. now you have unlicensed mortgage bankers carrying out the same @#$%^ that Ameriquest taught them.
Banks and DOC (dept of Corp) brokers did not have to disclose their rebates to consumers b/c of their regulators did not require them to..
Banks will fight this tooth and nail not to disclose to the consumer their rebates they make on any loan. We Dept of Real Estate licensed and regulated Loan officer are required to disclose every penny.. i know; a lot of bad actors did not and will not; these are the people we need to send packing.
I know there are a lot of great honest people in the mortgage and real estate industry, but it only takes a few bad actors to bring an entire industry down. (dont throw out the baby with the bath water)
the Nat’l Assoc of Mortgage Brokers is fighting to have all loan originators licensed no matter if you work for a bank, brokerage, credit union or real estate company; this is needed for many reasons: one) “flight risk” meaning if someone loses their ability to lend in one state they should not be freely able to go to another state and start fresh.
we also need consequences for action and the threat of someone will do something about the bad actors.
the sad part about this story is that big corporation are still selling option arms on a national level even after this “eye opening” disaster. i find it also sad that the big boys still think that consumers are stupid enough to believe their lies and continue as nothing has happen.
Welcome to the “Its all about me” club..
Moe keep up the great work and expose all the “bad actors” and their contribitors. (the wall street journal had a great article last week about all the political capital that Ameriquest spread all over Washington – this is no longer a Jimmy Stewart (wonderful life) type of industry any more.
Hopefully everyone will learn and educate each other that the “if it seems to be too good to be true; it probably is” theory. we all need to watch out for each other and speak up and stand up against the bad actors in every industry.
God Bless America
IF we stand up for each other, awe can make great changes. History has taught us this lesson over and over
” i find it also sad that the big boys still think that consumers are stupid enough to believe their lies and continue as nothing has happen.
Welcome to the \’e2\’80\’9cIts all about me\’e2\’80\’9d club..”
But it’s true, as long as consumers remain uneducated they are prey. The book that Countrywide sent out with their loan (I received it AT closing by the way, not before, with the GFE) it’s got more than 40 loans in it, and the language is Greek to me — imagine an elderly couple, a couple who has English as their second language, someone who doesn’t have the benefit of a college education?
There needs to be full disclosure in a language that anyone can understand. THere needs to be a companion sheet created for the HUD 1 that explains each and every itemized charge in a language that anyone can understand, with numbers not listed in parenthesis in the margin where someone can miss it, or prefaced by initials like POC or YSP that is a mystery to most people; LOs/MBs need to stop talking to clients about points and start talking dollars and cents. Then and only then can LOs and MBs remove the stigma on their industry.