Fighting Future Foreclosures

The Northeast District of NeighborWorks America announced it will hold Foreclosure Awareness Day on Sept. 29 in an effort to reduce the increasing pace of foreclosures in the region. Nineteen NeighborWorks organizations, stretching from Rochester, N.Y., to Newark, N.J., and San Juan, Puerto Rico, will hold informational events in their communities. Plus, a range of other activities will be taking place, including housing experts from Community Development Corp. distributing information at a major mall and Brand New Day holding an all-day event of face-to-face counseling for borrowers.

In light of more than 2 million borrowers nationwide at risk of significantly higher and unaffordable mortgage payments by the end of next year, and the expected continuance of the historical causes of foreclosure — job loss, medical emergency and other unforeseen circumstances, NeighborWorks is “offering clear, objective and actionable information for homeowners so that if trouble emerges they are better able to make informed decisions,” the nonprofit group said.

Meanwhile, the National Association of Mortgage Professionals Inc. launched a free MORTGAGE M HELPLINE to answer the public’s mortgage-related questions. The organization said it set up the help line in response to the large volume of calls it received from people seeking information and to help establish credibility in the mortgage industry. Calls will be answered by “educated and ethical” professionals and no one will be solicited for mortgage financing.

Pennsylvania’s Department of Banking is backing two bills that would improve oversight of real estate appraisers and require companies to notify the state when they attempt to foreclose on borrowers.

In recent weeks, the housing finance agencies of Maryland, New York, Ohio and Massachusetts, responded to ongoing concerns of rising delinquencies and foreclosures by rolling out refinance programs intended to help distressed borrowers, and other states may follow,” Moody’s Investors Service announced. But, in analyzing their effect on credit quality, “so far, none of the new programs has had a material impact on the financial position of its sponsoring HFA, or its bond programs, and they have prompted no ratings changes.”

Moody’s said the housing agencies must balance offering meaningful assistance and negatively affecting their own credit quality with offering a meaningful product while avoiding symptoms affecting some sectors of the mortgage market.

Maryland, New York and Ohio plan to offer fundings of $100 million and Massachusetts up to $250 million to refinance mortgages for borrowers who, despite some financial pressure due to their mortgages, have been able to maintain an adequate credit profile to qualify for an amortizing loan.

“Based on our analysis, these programs may become more material to the agencies that sponsor them if they increase in volume, or if there is a change in the nature of the risks undertaken,” Moody’s added.

And in a move to provide equal access to bankruptcy relief for homeowners, and consequently prevent 600,000 foreclosures and preserve $72.5 billion in communities’ wealth, Representative Brad Miller, D-N.C., introduced a bill that would enable bankruptcy courts to modify abusive first mortgages. Current bankruptcy law allows financial relief for loans on vacation homes, investment properties and even boats, but specifically bars borrowers from restructuring the mortgage on their residence, even when foreclosure is imminent, the Center for Responsible Lending announced.

“The biggest benefit of the law will be the establishment of standards that servicers will adopt for sustainable loan modifications, enabling families to receive voluntary modifications that will enable them to avoid even the need of entering bankruptcy,” the center said in the announcement.