Foreclosure Solutions Proliferate

Minneapolis-based Homeownership Preservation Foundation announced it received a $150,000 grant from Countrywide Financial and will seat Countrywide executive Sandor E. Samuels on its board of directors. The grant is in support of the foundation’s counseling services to help prevent foreclosures.

“The 888-995-HOPE foreclosure counseling hotline has been a lifesaver for many homeowners across the country, and the Foundation continues to be a laboratory for foreclosure prevention best practices,” Samuels was quoted as saying in the announcement.”

The help for further foreclosure prevention comes just a survey showed that growing foreclosures are fast becoming the No. 1 problem facing communities, the National Alliance of Community Economic Development Associations announced. Half of the participating 20 member states said that job loss was the primary reason behind foreclosures in their communities — and all of participants cited poor mortgage products with escalating rates and other inappropriate lending products, particularly subprime and exotic adjustable-rate mortgages, as a factor in foreclosures. Divorce, escalating property taxes and emergent or unexpected medical costs were also cited as major factors.

NACEDA noted that Indiana has passed a bill providing funding for a foreclosure-counseling network, counseling training, a help hotline and a foreclosure study committee that will convene in August. Also a separate law, effective July 1, placed additional regulations on mortgage brokers as they now must have a minimum bond, requirements for continuing education and must provide evidence of no criminal record to receive a license.

Meanwhile, Michigan is drafting bills to regulate mortgage brokers, police mortgage fraud and create a rescue fund pool, NACEDA added.

Borrowers and mortgage prospects appear to be taking steps of their own to educate themselves on mortgages and avoid foreclosure, as 1,000 copies of the FHA Lending Guide had been downloaded as of Monday from online mortgage resource Mortgage Loan Place, according to an announcement. The guide was created by Mortgage Loan Place in conjunction with the FHA’s recent push for consumer education and intends to help deter the “subprime bust,” or high number of subprime foreclosures that began in late 2006 and are expected to continue until early 2008 as a result of ARM rate increases.

Nonetheless, in Colorado, a local office of the U.S. Department of Housing and Urban Development will be offering a free meeting for borrowers who are facing foreclosure, as well as for interested community members, according to the office’s Web site. The informational meeting will take place in Denver on Aug. 2.

And within the next couple of weeks, the State of New York Mortgage Agency will be launching a $100 million refinance loan program to assist families who are facing a potential hardship due to an ARM that has already or will soon reset, agency spokesman Philip Lentz told MortgageDaily.com in an e-mail statement. While the details are still being finalized, the program is intended to help between 500 to 700 low-, moderate- and middle-income borrowers. There will be income limits on potential borrowers and a limit on the size of the refinance. The agency expects applicants to be primarily subprime borrowers.