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HOPE NOW Alliance testifies: California workouts outpace foreclosures by a 2-1 margin

Dec 16, 2009

Faith Schwartz, executive director, of the HOPE NOW Alliance, testified before the State Assembly Select Committee on the Safety and Protection of At-Risk Communities in California. Schwartz testified that through October 2009, more than 279,000 California homeowners received mortgage workout solutions. This compared to about 139,000 foreclosure sales in the state this year shows that workout solutions outpace foreclosures in sales two to one in California. “Nearly 500,000 California homeowners are delinquent on their mortgage by 60 days or more, these homeowners need assistance and it is a significant challenge. At the same time the number of workout solutions offered demonstrates that help is being provided and the mortgage servicing industry has made a serious commitment to helping distressed borrowers avoid foreclosures,” said Schwartz. HOPE NOW members are supporters and participants in President Obama’s Home Affordable Modification Program (HAMP). Schwartz testified that the Treasury Department has reported that on average, over 20,000 Homeowners are approved for HAMP trial modifications every week, saving homeowners $550 dollars a month for their mortgage. HOPE NOW’s goal is to turn as many trial modifications into permanent modifications as possible. HAMP is not, however, the only useful loan workout tool that servicers are using to help borrowers. In 2009, 2.6 million homeowners nationwide received a non-HAMP mortgage workout which prevented foreclosure. Since mid-2007, that number is 5.8 million homeowners. Workout solutions include loan modifications, repayment plans, extended forbearance, and if none of those solutions work, deed in lieu and short sales. HOPE NOW has held several events for California borrowers who are in danger of losing their home, where they are given the opportunity to meet face to face with their loan servicer. To date, HOPE NOW member servicers have helped over 10,000 California borrowers avoid foreclosure via these events. “HOPE NOW continues to encourage worried homeowners to seek help by calling the Homeownership Preservation Foundation’s Homeowner’s HOPE Hotline, 888-995-HOPE or by working with a local HUD certified counseling organization that provides free counseling services,” Schwartz said. “HOPE NOW has also launched a web portal, HOPE LoanPort with six counseling agencies, six nationwide servicers and a mortgage insurer. HOPE LoanPort housing counselors can submit completed borrower applications and supporting documents for HAMP directly to servicers and track the status to more quickly give homeowners the answers they need. The mortgage servicers initially participating in the HOPE LoanPort include: American Home Mortgage Servicing Inc., JP Morgan Chase Manhattan, GMAC Financial Services, SunTrust, PNC Mortgage and Saxon Mortgage. HOPE NOW has long advocated the role of HUD-approved, non-profit housing counselors in helping at-risk borrowers and is working with the Cabrillo Economic Development Corporation in Ventura, CA, in the portal’s first phase. The HOPE LoanPort™ is expected to launch nationwide in early 2010. For more information, visit www.HopeNow.com.
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Dec 16, 2009
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