Homeownership Preservation Foundation Applauds State Attorneys General Settlement with Mortgage Servicers; Releases Statement on “Significant Victory” for Distressed Homeowners
WASHINGTON, D.C., February 9, 2012 – The Homeownership Preservation Foundation (HPF), an independent national nonprofit dedicated to helping distressed homeowners navigate financial challenges and avoid mortgage foreclosure through its Homeowner’s HOPE™ Hotline at 888-995-HOPE™, today released the following statement in response to the announced settlement between state attorneys general and major mortgage servicers:
“Today’s announced settlement with major mortgage servicers is a significant event for financially distressed homeowners struggling to stay in their homes,” said Colleen Hernandez, CEO of the Homeownership Preservation Foundation. “Thousands of financially challenged homeowners call the HOPE Hotline every day, and 75% of them have told us that they have experienced challenges with the process they must undergo for help. This settlement will provide relief and help alleviate the tension between lenders and distressed homeowners, improve the loan modification and foreclosure process, and, by doing so, help restore the housing market.”
The terms of the $25 billion settlement between the state attorneys general and five of the nation’s largest mortgage lenders call for $1.5 billion in financial support to be distributed to approximately 750,000 individuals, many of whom lost their homes due to unfair foreclosure practices, such as robo-signing, which is now banned; it also requires the banks to extend more sustainable loan modification opportunities, with at least $10 billion going toward principal loan reductions and at least $3 billion toward refinancing loans for underwater borrowers. An additional $3.5 billion includes federal and state funding for housing counseling, legal aid, and other similar public services. The settlement also impacts future servicing standards, with new requirements for mortgage documentation, communications with borrowers, and foreclosure proceedings, among other key areas of their operations.
An estimated eight million people have lost their homes to foreclosure since the start of the housing crisis. Many homeowners have alleged that poor and improper communications with lenders exacerbated their difficult financial situations, leading to premature or unwarranted foreclosures.
Hernandez added: “Our research shows that the overwhelming majority of homeowners in trouble prefer the assistance of an independent third-party housing counselor when working to resolve their mortgage challenges, which includes acting as a liaison with their lenders. Accordingly, the Homeowner’s HOPE™ Hotline (888-995-HOPE), has already staffed up in anticipation of the increased interest with homeowners seeking additional assistance and more information regarding the settlement.”
The Homeowner’s HOPE™ Hotline is featured on the settlement’s website as a central resource for borrowers seeking information on mortgage and foreclosure programs.
Currently, the Hotline receives more than 4,000 calls a day, counseling more than 1,000 homeowners. Callers to the Hotline speak to an informed individual within 30 seconds and a trained professional non-profit counselor usually within two minutes. Seventy percent of those counseled report they are still in their homes a year later, having avoided foreclosure.
About the Homeownership Preservation Foundation
The Homeownership Preservation Foundation (HPF) is an independent national nonprofit dedicated to helping distressed homeowners navigate financial challenges and avoid mortgage foreclosure. HPF guides consumers onto the path of sustainable homeownership and develops innovative solutions to preserve and expand homeownership. Through its Homeowner’s HOPE™ Hotline, 888-995-HOPE™, HPF provides comprehensive financial education and confidential foreclosure prevention counseling for FREE, 24 hours a day, 7 days a week, 365 days a year, in over 170 languages. Since 2007, HPF has served more than five million distressed homeowners, an average of 5,500 each weekday, who depend upon HPF as a trusted, neutral source of information and assistance. For more information about the Homeownership Preservation Foundation or the Homeowner’s HOPE™ Hotline, please visit www.995hope.org