Foreclosure Prevention Journal

TD Banknorth Charitable Foundation issued $100,000 to NeighborWorks America to support foreclosure prevention and community needs identified at the recently held 28th NeighborWorks Community Leadership Institute conference. The grant is in addition to $40,000 TD had previously issued to the institute. More than 400 residents and emerging community leaders gathered at the conference to discuss community issues and needs.

On Wednesday, Indiana made available the 877-GET-HOPE hotline and Web site to provide help for borrowers who have fallen behind on their mortgages. The Momentive Consumer Credit Counseling Service will assist borrowers over the phone or refer the borrower to a certified foreclosure intervention specialist. The state is distributing brochures and posters to market the service and early next year will roll out a media campaign that will target areas experiencing high foreclosure rates.

Ohio Attorney General Marc Dann announced Thursday his office and state’s Department of Commerce will be filing a number of subpoenas to investigate the practices of subprime lenders for possible violations of anti-trust laws, civil rights statutes, and the consumer sales practices act. The investigations will be done by task force staff the attorney general previously assigned to probe predatory lenders and has so far forced New Century Financial to consult the office and department prior to foreclosing on a home and led to lawsuits against a number of mortgage companies and appraisers.

The announcement came after servicers refused to sign the proposed Compact to Help Ohioans Preserve Homeownership, which reportedly intended to have servicers take all measures to increase loan workouts and commit to boosting workout resources, plus provide monthly reports of the number of loans, type and percentage of workouts and foreclosures initiated.

“Their refusal to sign the compact speaks volumes about their crass disregard for the people they have hurt and the communities they have destroyed,” Dann said in the announcement.

But the Mortgage Bankers Association and the Ohio Mortgage Bankers Association, which had both previously disapproved of the compact, suggested that the Ohio governor convene a summit of all servicers operating in Ohio to discuss and plot a agreeable plan to prevent foreclosures.

“We have had significant dealings with the governor and other state officials, and we brought forth a proposal that we thought was fair and practical,” MBA said in an announcement Thursday.

Connecticut Gov. M. Jodi Rell announced a $50 million refinancing program for first-time low- to moderate-income subprime borrowers who are having trouble make payments due to their loans adjusting to higher interest rates. The CT Families program, under the administration of the Connecticut Housing Finance Authority, will refinance them into 30-year, fixed-rate amortizing loans that will have a rate of 6.25 percent, or 0.25 percent above the authority’s regular rate, currently at 6 percent. The authority will begin taking applications for the new program on Dec. 10.

Over in New York, Attorney General Andrew Cuomo announced a $2 million program that will match private grants, to provide financial support for foreclosure prevention counseling groups and legal aid societies.

In anticipation of rising delinquencies as nearly an average 450,000 subprime ARMs are expected to reset per quarter through the end of 2008, the Federal Reserve has lowered discount rate in order to provide liquidity and called on mortgage lenders and servicers to pursue prudent loan workouts, Federal Reserve Board Chairman Ben S. Bernanke noted in recent testimony before Congress. The Fed has also participated in efforts by community groups to help borrowers avoid foreclosure and to identify high-risk localities as well as contributed to foreclosure prevention programs, such as the Home Ownership Preservation Initiative, which was partly initiated by the Federal Reserve Bank of Chicago.