Foreclosure Counseling:

1
Foreclosure Counseling

• An Update on Community Effort

2
HUD Approved Housing Counseling Agencies Omaha

• CCCS of Nebraska
• [phone]
• www.cccsn.org
• Credit Advisors Foundation
• [phone]
• www.creditadvisors.org
• Family Housing Advisory Services (FHAS)
• [phone]
• www.fhasinc.org

3
Trends

• Make-up of homeowners is dynamic
• Most homeowners could not initially afford the
  mortgages they obtained to purchase their
  properties
• Many homeowners lack basic budgeting skills and
  have never attended homebuyer education
• Many homeowners facing foreclosure are seniors
  with fixed incomes
• Many homeowners are facing resetting ARMs and are
  unable to refinance due to credit issues
• Medical costs and job losses often play a part in
  mortgage delinquency

4
Loss Mitigation Options -Reinstatement

• Repayment Plan temporary
• Loan Modification change in interest rate,
  payment amount, or unpaid principal balance
• Forbearance suspend payments for a fixed period
  of time
• Partial or Advance Claim MI company advances
  funds to reinstate loan
• Reverse Equity Mortgage Reversed mortgage
  payment process
• Refinance must have equity in home and
  generally good credit

5
Loss Mitigation Options -Disposition

• Sell the property if value is sufficient
• Hardship Mortgage Assumption for a qualified
  applicant
• Short Sale Sale of property for less than the
  loan balance, as approved by the servicing lender
• Deed-in-Lieu of Foreclosure borrower
  voluntarily conveys title to the lender in
  exchange for a discharge of the delinquent debt
• Foreclosure in many cases, may be unavoidable

6
Challenges Faced by Foreclosure Counselors

• Borrowers often wait until the 11th hour to
  seek help
• Extensive documentation requirements
• Ability to contact the mortgage servicer often
  waiting for hours on the phone
• Increasing demand creates time constraints
• Borrowers falling victim to foreclosure scams

7
Foreclosure Scams

• Phantom Help Rescuer charges outrageous
  upfront fees for services it never provides.
• Bailout Scheme Homeowner surrenders title and
  rescuer sells or leases the house back at
  current market value. The new payments are
  unaffordable and the homeowner is evicted
• Bait and Switch Rather than loan refinance
  documents, homeowner signs a deed transferring
  ownership to the property to the rescuer

8
Family Housing Advisory Services (FHAS)

• Number of Foreclosure Counseling Cases
• Opened Completed
• 2007 298 259
• YTD 2008 223 199

9
United Way 2-1-1 Calls Began taking calls in
April 2008
United Way provides Omaha callers with contact
information for both Consumer Credit Counseling
of Nebraska (CCCS) and Family Housing Advisory
Services (FHAS)
10
HOPE NOW CALLS (888-995-HOPE)
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What Can Help?

• Increased regulation and enforcement in regards
  to sub-prime market
• Continued tightening of credit underwriting
  guidelines
• Require face-to-face homebuyer education
• Consumer awareness to predatory lending and
  foreclosure scams
• Outreach efforts to homeowners before they are in
  serious delinquency
• Training more counselors in foreclosure
  mitigation
• Other ideas?

12
National Foreclosure Mitigation Counseling (NFMC)
program

• Program launched in Dec 2007 and grant
  administered by NeighborWorks America
• Awarded 1.89 million statewide in Iowa and
  512,000 statewide in Nebraska
• NIFA IFA are some of the intermediary
  organizations passing funds to local agencies
• Should provide various levels of counseling for
  approximately 1,400 homeowners in the metro area
• More information at www.nw.org

13
Foreclosure Basics Training

• Nebraska Investment Finance Authority (NIFA)
  awarded a 10,000 grant from NeighborWorks
  America
• Held June 17th 18th at Embassy Suites in
  Lincoln
• Foreclosure Basics HO109 - two-day course
• 28 non-profit staff members attended from across
  the state, including Allen, Chadron, Cozad,
  Fairbury, Grant, Lincoln, Norfolk, North Platte,
  Omaha, Santee and Wayne
• NeighborWorks America provided course material
  and waived training cost
• NIFA provided lodging and/or mileage stipends

14
Thank you!

• Meribah Moore
• Community Development Specialist
• Nebraska Investment Finance Authority (NIFA)
• meribah.moore_at_nifa.org