The foreclosure crisis is an opportunity to reorient housing strategies to focus on creating and supporting neighborhoods that offer residents an attractive place to live. The Building Resilient Regions Network, funded by the MacArthur Foundation through the University of California at Berkeley, is developing applied knowledge about how regions can be resilient in the face of significant...
Housing Counseling
A homeowner facing foreclosure is often worried, stressed, and confused about the best course of action to take in order to save his or her home. Housing counselors serve as vital intermediaries between troubled homeowners and their mortgage servicers and work with homeowners to determine the best possible options for staying in their homes. About 45 percent of homeowners who complete counseling are able to stay in their homes, which is higher than those homeowners who do not complete counseling.
However, most housing counselors in the Chicago region do not have sufficient capacity to meet the recent influx of demand for their services. This problem is particularly acute in South and West Cook County, which have high rates of foreclosure but relatively few counseling agencies, and the collar counties. Clear lines of communication with servicers are crucial to finding the best option for the homeowner, and counselors still struggle with a lack of servicer responsiveness, transparency, and accountability. Borrowers often do not seek help until they are seriously delinquent on the mortgages or already in the foreclosure process, when it may be too late to keep the borrower in his or her home. The demand for legal counseling has also risen with that of foreclosure counseling, with low-income home owners in the Chicago area increasingly needing legal representation. The need is particularly acute in the southern and western suburbs of Chicago, where the numbers of foreclosures are risingand legal aid and court-based resources are scarce.
Counselors need more resources in order to adequately meet the need for their services, as well as ongoing training to keep up with the rapidly changing options for preventing foreclosure. Servicers need to improve internal recordkeeping and communication procedures and increase transparency into their decision-making process. Outreach must be appropriately targeted and motivate borrowers to seek help before their loans are seriously delinquent.
This page details efforts by Regional HOPI partners to increase capacity of counselors by advocating for federal and state resources and holding regular trainings on best practices, pioneer new ways of reaching borrowers, improve data collection on counseling outcomes, and improve networks among counselors. The Regional HOPI Action Plan identified Chicago region needs for housing counseling and legal aid and prioritized enhancing outreach, increasing access, and improving networks.
The National Foreclosure Mitigation Counseling (NFMC) program is a special federal appropriation, administered by NeighborWorks® America, to support a rapid expansion of foreclosure intervention counseling in response to the nationwide foreclosure crisis. This report updates preliminary analyses measuring the effect of the NFMC program on counseled homeowners. Overall, our analysis...
Over the past decade, concerns have been raised about the extent to which Americans as a whole are sufficiently financially literate to make the complex decisions required in the ever-changing financial marketplace. In response to these concerns, financial education, which aims to make onsumers more informed decision makers, has proliferated. Homeownership education and counseling (HEC)...
To restore stability and liquidity to the financial system, Congress established the $700 billion Troubled Asset Relief Program (TARP) and directed the Department of the Treasury (Treasury) to use the authorities granted under TARP to, among other things, preserve homeownership and protect home values. In February 2009, Treasury announced that up to $50 billion in TARP funds had been allocated...
Using data from the Making Connections Cross-site Survey, this brief explores movement into and out of homeownership for families with children in selected low-income neighborhoods. We find that poor families and those with less home equity are more likely to move out of homeownership. With the reduction in home prices in many areas, brought on by the housing crisis, there are increasing...
The study examined mortgage delinquency and foreclosure rates among the owner-occupants of resale-restricted houses and condominiums in community land trusts (CLTs) across the United States and compared CLT results to rates of delinquency and foreclosure among the owner-occupants of conventional market-rate housing reported by the Mortgage Bankers Association’s National Delinquency...
By Janet Currie, Erdal Tekin
National Bureau of Economic Research
We investigate the relationship between foreclosure activity and the health of residents using zip code level longitudinal data. We focus on Arizona, California, Florida, and New Jersey, four states that have been among the hardest hit by the foreclosure crisis. We combine foreclosure data for 2005...
Pop quiz: what do these three stories have in common?
Story #1: When Martin and Michelle Flores moved from Guanajuato, Mexico to Elgin five years ago, they dreamed of setting down roots and creating a home for their young son, Matthew. The Neighborhood...
In 2010, the Circuit Court of Cook County created the Mortgage Foreclosure Mediation Program to assist homeowners who have received a foreclosure summons from the Court. Funded by the Cook County Board, the Program was established in response to the recent economic recession and related mortgage...
In May 2011, the Circuit Court of Cook County released a progress report on the Mortgage Foreclosure Mediation Program. To date, nearly 27 percent of homeowners going through the Program have been able to save their homes; the other 73 percent, who have experienced either a...