Freddie Mac, whose primary function is providing mortgage capital to lenders, also knows how important neighborhood outreach is to struggling homeowners facing foreclosure.
In launching “Borrower Help Centers” in key cities this month, as well as a “Help Network” nationwide, Freddie Mac is teaming with non-profit organizations to provide financial counseling “that goes further than standard mortgage delinquency counseling and focuses on credit cards, auto loans and other credit problems that can directly affect the borrower’s overall financial health,” according to Dwight Robinson, Freddie Mac’s Corporate Relations & Housing Outreach SVP.
In an article released today in the corporation’s “Featured Perspectives” publication, Robinson wrote about Freddie Mac’s commitment in a “two-pronged pilot effort” to reach thousands of delinquent borrowers with free and confidential “holistic” financial counseling.
Freddie Mac and the non-profits are using statistics to bolster their contention that this type of neighborhood networking through the organizations already familiar to residents yields results by moving distressed borrowers into foreclosure rescue programs, or keeping them there.
Robinson refers to a November 2009 study of 61,000 delinquent loans. The organization, NeighborWorks America, found that borrowers are 60 percent more likely to avoid foreclosure “when they receive counseling from a qualified non-profit organization during some stage of foreclosure,” Robinson said.
The Borrow Help Centers in the test markets provide borrowers with a dedicated counselor to review requirements under mortgage relief offered through Freddie Mac and Making Home Affordable – the primary modification program from U.S. Treasury and HUD (Housing and Urban Development). These “workout requirements” help clients apply for mortgage payment reductions, and provide the necessary documentation or information needed to complete the daunting process.
“As part of this pilot, we’re identifying the delinquent borrowers who never called their servicer for help or stopped trying because they were overwhelmed or discouraged by the complexities of the modification process, put off by the confusing and conflicting messages about efforts to reduce foreclosures, or some other reason,” Robinson said.
The non-profit groups are then contacting the borrowers through letters or phone calls offering the free counseling.
These organizations have “established solid and trusted reputations in their respective communities,” he said. “We believe their reputations have the potential to overcome the misinformation, hesitation or frustration that are keeping some eligible borrowers on the sidelines of a workout.”
For homeowners seeking help, there is more information here: www.freddiemac.com/avoidforeclosure/
Borrower Help Centers
- Chicago, IL: Latin United Community Housing Association, Chicago Neighborhood Housing Services;
- California – Inland Empire: Neighborhood Partnership Housing Services;
- Phoenix, AZ: Phoenix NHS, Chicanos Por la Causa;
- Washington DC: HomeFree-USA
Borrower Help Network:
- National Urban League and its chapters in Broward County, FL and Hampton Roads, VA;
- National Council of La Raza (NCLR) and affiliates Southwest Housing Solutions (Detroit) and New Economics for Women (Los Angeles);
- The Metroplex Economic Development Corporation (Dallas);
- Korean Churches for Community Development;
- Boat People SOS