HUD Secretary and Chicago Mayor Daley Stress Foreclosure Prevention
Foreclosure does not have to be inevitable. That was the message from U.S. Housing and Urban Development Secretary Alphonso Jackson (shown at right) and Chicago Mayor Richard Daley recently as they encouraged residents to attend a city-sponsored "Borrower Outreach Day." Jackson and Daley visited the Tuley Park Field House where the city will be holding a workshop to support, educate, and assist homeowners in need of help keeping their homes.
"This workshop is important. Simply put: it may make the difference between keeping your home and losing it. You don't have to suffer in silence. You don't have to lose your home. There are new means of assistance," Jackson said.
"Borrower Outreach Day" will allow homeowner to meet with lenders and housing counselors about their refinancing options, how to avoid foreclosure, and get their personal finances back in order.
HUD is aggressively working to help as many homeowners as possible. Today, HUD's Federal Housing Administration (FHA), which insures low-cost, affordable mortgages, has successfully expanded its products to help more people avoid foreclosure through refinancing their existing loans. Through FHASecure, which refinances mortgages that are current or past due, HUD has been able to assist almost 76,000 Americans since last fall, including more than 3,400 families in Illinois. More than 90 percent of borrowers who refinanced from the subprime market into FHA now have 30-year fixed rate loans at a much lower monthly cost. FHASecure will help 300,000 families by the end of this year.
"If Congress would complete their work on a bill to modernize the FHA, then we could reach even more people. For two years, the President and I have urged Congress to let FHA reach more hard-working Americans. Every day of delay puts hundreds of thousands of homeowners at unnecessary risk of foreclosure," Jackson stressed.
Bipartisan legislation is pending before Congress that would increase loan limits for FHA-insured mortgages, relax downpayment requirements, and allow the FHA to offer fair and flexible insurance premiums. While the The Expanding American Homeownership Act has passed both Houses of Congress, a final version still has not been sent to the President for his approval.
"There are many options; many sources of assistance. But, surprisingly, many people still treat foreclosure as inevitable. I am troubled by the fact that there is so much denial ... that many homeowners facing foreclosure will not call their mortgage lenders for help...that some won't seek any help at all," said Jackson.
Secretary Jackson and Treasury Secretary Henry Paulson have worked with lenders, loan servicers, mortgage counselors and investors to establish a private-sector alliance called HOPE NOW. This alliance has implemented a plan that will help up to 1.2 million homeowners avoid foreclosure in one of three ways:
- Refinancing existing loans;
- Moving borrowers into FHASecure loans; and
- Implementing a five-year freeze on reset interest rates for subprime loans.
"The industry has already assisted 370,000 homeowners and HOPE NOW has contacted more than half a million subprime borrowers."
To encourage homeowners at risk of foreclosure to attend the workshop, Jackson said: "Here is where you can explore the range of options available. Here you can find housing counselors to advise. Here you will find mortgage lenders who are working to assist you to keep your home. Here you will find hope...and help."
More information about HUD and its programs is available on the Internet at www.hud.gov and