HUD kicks off six-city financial literacy campaign to help troubled homeowners avoid foreclosure and rescue scamsMortgagePress.comHUD, foreclosures, financial literacy, Steve Preston, housing crisis, housing counseling agencies
U.S. Housing and Urban Development Secretary Steve Preston today
announced HUD's latest effort to prevent foreclosure by launching
an aggressive consumer education campaign in six cities. HUD's
"Keep Your Home. Know Your Loan." campaign will kick off in
Chicago, Detroit, Los Angeles, Miami, New York and Phoenix. Preston
launched the public awareness initiative at Neighborhood Housing
Services, a New York City agency that offers clients free mortgage
delinquency and default resolution counseling.
HUD's financial literacy campaign builds on the Department's
continuing commitment to support its 2,600 housing counseling
agencies across the country. In 2008, demand for HUD-approved
counseling increased significantly. Meanwhile, the number of
foreclosure rescue scams has also increased in response to the
nation's housing crisis.
"This campaign is a call to action for families at risk of
losing their homes," said Preston. "We want people to pick up the
phone and call a HUD-approved housing counseling agency before they
reach a point of no return. Keeping your home may be as easy as
Many troubled homeowners seek help late in their financial
crisis thereby limiting their loan modification options. HUD's
campaign will target homeowners who are three-to-six months from
defaulting on their mortgage, facing a reset on their
adjustable-rate mortgage, or are experiencing a family crisis such
as unemployment or skyrocketing health care costs in 2009.
The "Keep Your Home. Know Your Loan." campaign will include
print, radio and television public service announcements, as well
as a tool kit for non-profit counseling agencies that will support
the effort. In each PSA, consumers are directed to call HUD's
toll-free counseling hotline (877-HUD-1515) to arrange free
face-to-face meetings with a counselor near them. Since most
HUD-approved counseling agencies lack the resources for marketing
and outreach, the Department is launching this campaign to help
consumers earlier in their financial crisis and to fight the
explosion of "pay-to-play" loan modification scams.
HUD's support for housing counseling agencies has grown
significantly, from $20 million in 2001 to $50 million in 2008. In
addition, federal support has now grown exponentially with $360
million in additional funds in 2008 specifically for foreclosure
prevention counseling. HUD has requested another $65 million to
support local housing counseling agencies in FY 2009.
Research finds HUD-approved housing counseling is effective to
prevent foreclosure. A recent HUD study noted a 55 percent increase
in the number of clients receiving foreclosure prevention
counseling between 2006 and 2007. Of the approximately 136,000
families that completed this counseling during 2007, 45 percent
were able to remain in their homes while 14 percent ultimately lost
their home through foreclosure. This report also found that in the
years leading up to the current crisis, more than 55 percent of
low-income families seeking to buy their first home did not seek
out pre-purchase counseling. This lack of counseling likely left
them unprepared to make one of the biggest financial commitments of
their lives and may have contributed to some of today's high rates
of default and foreclosure.
For more information, visit www.hud.gov.