The director of the HOPE NOW Alliance has ofered an update on the organization's progress as well as what it hopes to accomplish in the future, including securing funding for foreclosure counseling. Faith Schwartz spoke at the Federal Reserve Bank of Cleveland Community Development Policy Summit in Cleveland, Ohio on Wednesday.
The HOPE NOW alliance was organized at the very beginning of the housing crisis, just before the subprime markets began to unravel in July 2007. It was formed with the help of Treasury Secretary Henry Paulson and members from Housing and Urban Development. Currently, the alliance consists of 27 lending services, representing over 90 percent of majority of subprime services and a majority of prime services, Schwartz said.
"We're very focused on preventing foreclosures as best we can and keeping people in their home," Schwartz said.
However, she said that the HOPE NOW alliance could benefit from even more communication with homeowners and housing officials, allowing them to reach the most at-risk homeowners.
"A number of outreach efforts are underway, for any mortgage under stress," Schwartz said, adding that they are paying attention to prime as well as subprime loans.
As a part of their outreach effort, the HOPE NOW alliance sent out millions of letters to homeowners at risk of foreclosure, encouraging them to contact HOPE NOW to seek out foreclosure alternatives. Schwartz noted that they had around a 20 percent response rate to the letters, adding that they were "pleased" with the response rate.
Another goal of the alliance is to get funding for foreclosure counseling, Schwartz said.
HOPE NOW reported a total of 183,000 loan workouts in April, the highest monthly total since the organization's inception in July 2007.
The new total was 23,000 above March's level, bringing HOPE NOW's total to 1.6 million homeowners helped.
On a darker note, though, the report revealed that over 80,000 homes went into foreclosure in April. This represents an increase from March and makes it likely the country could see around 1 million foreclosures in 2008.
The organization also reported that 106,000 of the prime and subprime loan workouts in April were repayment plans. These repayment plans allow borrowers a longer time to repay the loans without actually reducing the total amount owed.
The remaining 77,000 workouts in April - 42% of the total - were loan modifications, which reduce the loan balance or interest rate.
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